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Pros and cons of filing for bankruptcy

Residents of Florida who are struggling to make ends meet and have enormous amounts of debt may consider filing for bankruptcy. While each case depends on individual circumstances, there are some basic guidelines that can help people asses if bankruptcy is their best bet. Filing for bankruptcy can give someone a fresh start, but it is not without consequences.

The main drawbacks associated with bankruptcy are loss of high-value assets and limited access to credit. If someone has certain types of property, it may be sold to pay off creditors during the bankruptcy process. Additionally, following a bankruptcy, credit will be limited and may be difficult to get without high interest rates and fees. It is also important to note that filing does not always discharge all debts. For example, student loans are often not covered by bankruptcy, but most debts are covered by filing.

The benefits of filing for bankruptcy can be enormous, however, especially for an individual who does not have a large amount of valuable property. Filing can clear out most if not all of someone's debt and allow him or her to obtain a clean financial slate. In many cases, people may even able to keep their home, automobiles and other personal belongings.

One of the best ways for people to determine if bankruptcy is right for them could be to talk to a Florida bankruptcy attorney. He or she may be able to assist them with the filing process and explain the differences between Chapter 7 and Chapter 13 bankruptcy, and if need be, even represent them in bankruptcy court.

Source: AOL, "Should you file for bankruptcy?," Caroline Cassidy, March 14, 2013

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