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Filing for Bankruptcy: What Could Happen?

Bankruptcy law book Some think that when you file for bankruptcy, you sell your proverbial soul to the devil.

While this view isn’t necessarily true, it does imply that bankruptcy is not an easy choice. It could mean short term relief, but it could also affect your self-image, reputation, and even future credit negatively.  The experts at Allstate Law Center add that before making this choice, you should consider all factors and options.

It is possible to cave under the pressure of debt, but here are a few things that you should know before looking for the services of a bankruptcy attorney in Denver, Colorado.

Argument for filing

Bankruptcy will alleviate most of your financial problems within a short time. Financial institutions and other creditors could give you the relief and time to pay your debt. It will protect you from having all your properties, investments, and belongings secured by lenders or even allow you to get new credit lines in about two to three years.

Argument against filing

Perhaps the biggest reason you should not be in a hurry to file for bankruptcy is that you will lose all your credit lines, as well as the opportunity to apply for a mortgage. There are also other downsides, such as being unable pay your student loan or unable to improve a ruined credit score for some years afterwards.

However, if you choose not to file for bankruptcy, your creditors and other financial companies could threaten you with a lawsuit and even hire a collection company to take any or all of your assets that would cover your debt.

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Weigh all the possible options which could include things like negotiating with creditors and involving a counseling agency. The silver lining in the whole situation though is that if you are asking these questions, you may have little to lose and could even protect your investments.