Tulsa Bankruptcy Attorneys

What Is The Downside of Filing For Bankruptcy?

Filing for bankruptcy has several potential downsides that individuals should consider before making the decision. Here are some common downsides of filing for bankruptcy:

• Negative Impact on Credit: Bankruptcy can stay on your credit report for years, making it difficult to acquire new credit or loans in the future. It may also result in higher interest rates or more stringent terms for any credit you can acquire.
• Loss of Assets: You may need to liquidate certain assets to settle your debts based on the type of bankruptcy you file (Chapter 7 or Chapter 13) and the exemptions available in Oklahoma. Non-exempt assets are liquidated in Chapter 7 bankruptcy while Chapter 13 allows you to keep your assets but requires a repayment plan. For someone who has precious possessions or significant value in their property, losing assets can be devastating.
• Impact on Personal and Professional Reputation:Filing for bankruptcy is a public record, which means that anyone who searches your name or credit history can find it. This may have an impact on your personal and professional reputation because it could be perceived as a negative financial event.
• Limited Access to Credit: After declaring bankruptcy, it may be more difficult to obtain credit or loans, and if you can, the interest rates and terms may be higher. It can take time and effort to rebuild your credit score and recover access to credit.
• Potential for Future Bankruptcy Restrictions: If you have previously filed for bankruptcy or abused the bankruptcy process, you may face restrictions on filing for bankruptcy again in the future. This can be a disadvantage if you later find yourself in financial difficulty and bankruptcy is no longer an option.
• Student Loan Discharge Is Rare: If you are struggling with federal student loans, in most cases, you will not be able to discharge them through bankruptcy, however, there are some exceptions. Talk to an experienced bankruptcy lawyer to learn more about the options available to you.
• Still Responsible For Some Debts: While most debts can be erased, you will still be accountable for repaying some. Aside from federal student loans, other liabilities, such as taxes, alimony, child support, court orders, and debts incurred via unlawful activities, are not dischargeable.

What Are The Benefits Of Filing Bankruptcy?

Individuals experiencing debts and financial difficulties may benefit from declaring bankruptcy. While the particular benefits vary depending on individual circumstances and the kind of bankruptcy filed (Chapter 7 or Chapter 13), the following are some of the most typical advantages of filing for bankruptcy:

• Debt Relief: Bankruptcy allows you to wipe out or restructure certain debts, providing a fresh start and relieving the burden of unmanageable financial responsibilities.
• Automatic Stay: This goes into effect when you file for bankruptcy. This legal safeguard prevents creditors from pursuing collection measures against you, such as foreclosure, repossession, wage garnishment, and harassing collection calls. The automatic stay gives you immediate relief while you navigate through the bankruptcy process.
• Repayment Plan: Chapter 13 bankruptcy permits you to create a court-approved repayment plan that will allow you to catch up on missed payments, which can help you prevent foreclosure or repossession and save your possessions while getting your payments back on track.
• Fresh Financial Start: Once your debts have been forgiven, you will be able to restore your credit, develop healthier financial habits, and make more educated financial decisions in the future.
• Elimination of Certain Debts: You may be able to wipe out or reduce certain types of debts, such as credit card debt, medical expenses, personal loans, and more, depending on the type of bankruptcy you file and your unique circumstances. This might be a huge relief and allow you to focus on regaining your financial stability.

Considering filing for bankruptcy? It's important to consult with an attorney to understand how these benefits apply to your specific case. At The Colpitts Law Firm, we can evaluate your financial situation, explain the potential advantages of bankruptcy, and help you determine if it is the right solution for your debt problems. With our extensive experience in bankruptcy law, we can provide personalized guidance and help you make an informed decision. Contact us today to make an appointment and begin to take the first step toward a new financial future.

Contact The Colpitts Law Firm at (918) 302-2662 for a free initial consultation.