Is Declaring Bankruptcy in Simi Valley a Good or Bad Step?
Bankruptcy is a legal procedure and an option for an individual, a family, or a corporation finding it difficult for them to pay off their debts. An entity opts to file for bankruptcy when it is unable to honor its financial obligations or make due payments to its creditors.
Bankruptcy is not inherently good or bad. Simi Valley bankruptcy law is an essential protection for honest consumers who find it impossible to pay off their debts.
There are several situations in which it will be advisable for an individual to file for bankruptcy:
Filing for bankruptcy could save you from losing some of your important assets like a home or a car. Consider a situation where your current income is not enough to pay off your mortgage. In such a case, a Chapter 13 Bankruptcy could help reorganize your repayment plan and save your home.
A Chapter 7 Bankruptcy, which is usually a last resort, is a good way of relieving yourself from emotional distress caused by creditors knocking on your door every other time at a situation where you have no real income to pay them. In such a situation, giving up all your assets to pay your debts and have peace of mind may serve you better.
However, the process of filing for bankruptcy is not as easy as it seems and it usually requires a lot of sacrifices.
Below are some reasons why you may find it not a good idea to declare bankruptcy:
Your credit score may start going down the moment you declare bankruptcy. Such a cause limits you from taking out loans.
When filing for bankruptcy, you will be required to share your personal financial information in a public court of law. All your lenders, business partners, potential employers, and clients will, for a long time, be able to access your bankruptcy filing.
Filing bankruptcy is not as cheap as the process needs a lot of money. Declaring bankruptcy is a huge financial step. However, in case you realize that your situation has left you in a debt that you are unable to pay, then it is the right step to get you back on track. Do not misuse bankruptcy because it can lead you to a worse financial situation.