Filing bankruptcy might have its advantages. However, we must also take note that it has its downsides as well. In this way, you’ll have a guide of what to expect once it is necessary for you to file one. There are individuals in Calgary who are filing bankruptcy without being aware of the disadvantages.
Yes, bankruptcy can surely save you from going completely broke. However, do the consequences it could bring is truly worth it? This is the question that we are going to answer in this article. We can determine the answer by jotting its disadvantages down.
Lack of Privilege in Using Credit Cards
Some people are dependent on the usage of credit cards. So it will affect them a lot if they will be deprivation of using credit cards. They rely solely on cashless transactions with the added benefits of buy now, pay later schemes.
By filing bankruptcy, your privilege of using a credit card will be automatically stopped. Although, you can still avail unsecured credit cards during the process those have very high fees. The good thing is it can be your way to slowly regain your good credit standing.
Lowering of Credit Score
If you are frequently availing of loans regardless of the purpose then having a lower credit score could impact you a lot. The Chapter 7 bankruptcy leaves an imprint on your status usually for 10 years and 7 years for Chapter 13.
Problems in Getting New Loans
You might be thinking of getting a new loan after filing a bankruptcy case. However, it could be really hard for you to get accepted as banks would not want to engage themselves with individuals who have uncertainties in their financial standing.
Property and Real Estate Losses
There are times when not the entirety of the personal properties are covered by the exemption. This entails that you could lose some of your property as payment to your creditors.
Tax Refunds Rejection
Bankruptcy can stop the processing of any state, local, and federal tax refunds. So you must not expect that you’ll get a tax refund because the chances of you getting it are very slim.
Can Hurt Your Reputation
Reputation is very important in getting a new job or applying for a housing loan. Creditors would not want to deal with individuals who have a pending bankruptcy case. It gives them the notion that they should not entrust their money to individuals who have financial issues.
Not All Debts Can be Waived Through Bankruptcy
There are debts that are not waivable through a bankruptcy filing. Some examples of it are alimony, child support, criminal restitution, fines, and child support.
Conclusion
It is really hard to undergo a financial downturn regardless of what industry you are working in. The most important thing is you weigh down your options before you start any actions. Filing for bankruptcy can be a good move for most people, but always remember that every person has a unique situation.
Now you know the disadvantages that bankruptcy filing can bring, you’ll now have a better understanding of the situation. This will help you decide if you will pursue a bankruptcy case.
If you are still clueless, seeking the help of professionals would really help. Regarding that, Bankruptcy Calgary Alberta can guide you all the way with that. We will be happy to assist you with your concerns, just message us for inquries.