Facing an overwhelming pile of debt can be stressful, but so can the results of declaring personal bankruptcy. While there are advantages to having your debt wiped out so you can have a fresh start, it’s important to consider all of the options and consequences carefully. Your family will be affected by your choices for the next few years.
The most obvious negative consequence of declaring bankruptcy is the damage that it will do to your credit rating. Of course, this may not be the most pressing thought in your mind, because your finances may be so bad that your credit rating really doesn’t matter at the moment.
It’s so important to consider what you might be facing during the next few years. You might have to pay much higher interest when you qualify for a loan, and it may be more difficult to qualify to begin with.
Another thing to remember when you’re considering the damage to your credit score is that you should probably lay off using credit cards and loans for a while anyway. You need to wait until you can be responsible and have enough money to pay off loans.
One consequence you may not have thought of is that innocent creditors will be hurt by your decision. We’re not just talking about huge corporations but also any small businesses that have extended you credit recently. This may be especially hard to take for the small businesses, but you should still not make a decision solely on this factor. You need to do what is best for you and your family.
Your reputation may also be on the line, and this is particularly meaningful if you live in a smaller town where everyone seems to know all of your personal business.
You may even have your name published on a bankruptcy list in some newspaper, and your bankruptcy filing will also be a matter of public record for those who are interested.
The bottom line is that you have to weigh the pros and cons and make the best decision possible for you and your family. If you and your attorney determined that this is the best course of action for you, don’t worry about less important factors.
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