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Bankruptcy Pros and Cons

Before you make the decision to file for bankruptcy, consider the pros and cons on your own or with a credit counsellor. Here are some important arguments to consider:

Pros

• The discharged bankrupt is relieved of most debts, and unsecured creditors cannot take legal steps to recover their debt. It allows you to make a “fresh start.”
• Bankruptcy generally does not affect employment.
• The bankrupt can avoid being harassed by creditors.

Cons

• Some debts are not released with a bankruptcy declaration. These include: spousal support, child support, debt arising out of fraud, court fines, and debts or obligations for student loans when the bankruptcy occurs while the debtor is still a student or within 10 years after the bankrupt has ceased to be a student.
• The bankrupt may have difficulty in being bonded
• It will negatively affect your credit rating, and will appear on your rating for six or seven years