It makes you wonder when you hear about so many people declaring bankruptcy whether they were hopeless regarding their repayments, or they deliberately chose it as a last resort. Bankruptcy has many different sides, beyond question. Some of them are horrible; others are not that bad. Being bankrupt surely puts you in a tight spot. Your credit score is damaged, bankruptcy cutting it down by 200 points or even more, not to mention the years it remains on your credit report. Thus, your credit score is seriously scarred, and you cannot find a reasonable creditor to offer you a reasonable credit or a loan with an acceptable interest rate; in fact, you might not get a new credit for up to four years. On top of it all, most ironically, you have to pay filing fees and attorney fees, meaning you have to pay in order to be declared bankrupt!
Besides all the bad features, besides the consequences and the impact it has on your credit score, bankruptcy is no doubt one of the most efficient debt solutions. It puts an end to your struggle; it means a permanent closure of your case. After having filed bankruptcy, your creditors cannot call you or contact you in any way in order to claim their share. In fact, it is illegal to disturb you with further warnings, duns and prompts. You can forget about the loan; you don’t have to worry about monthly repayments any more. The remaining debt is discharged, thus repayments are canceled. You can think of yourself as totally debt free. Nevertheless, remember that bankruptcy is a last resort. It should be the answer only in case there is no way you could get out of debt.
Comparing the pros and contras, the conclusion is that bankruptcy is not the worst thing that could happen to you. Your credit score would be strongly affected, your credit report spotted and credit history marked for a few years. You would be denied many possibilities at the financial square. However, you would still have the privilege to apply for bad credit loans. You would have the possibility to start over and exploit the possibilities of a fresh start, of a new beginning. You would have the chance to prove yourself eligible for a new loan by handling your remaining bills with care and showing more interest towards developing a good budget.
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