People sometimes avoid filing for bankruptcy because they are concerned that it is going to be a mistake. It’s going to have negative ramifications, such as reducing their credit score or making it impossible for them to get a loan. They may worry about losing certain assets if they have to liquidate them in Chapter 7 bankruptcy.
However, reports have shown that bankruptcy can actually be very beneficial on numerous fronts. One report claims that, for more than 25 years after the bankruptcy case has concluded, it leads to increases in employment opportunities, earned income overall, secured debt, home ownership, real estate ownership and much more. People who have filed tend to see an increase in the value of assets that they own and their overall wealth.
How could this happen?
Often, the issue is that the person’s debt was holding them back. They could not take advantage of some of these other opportunities because they were struggling just to make ends meet and to make those monthly payments.
For example, people are sometimes worried about losing real estate or a family home through foreclosure. But filing for bankruptcy can eliminate other debts that they have. Once the case has concluded, they may actually be able to afford to pay their mortgage again. This helps them to retain that valuable asset and continue having a home for their family. But it wouldn’t have been possible if they had not declared bankruptcy to get rid of medical debt, credit card debt or other substantial types of debt.
If you have been thinking about bankruptcy but you are concerned about the outcome, this is certainly worth considering. Be sure you know exactly what legal steps to take.