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Why You Should Avoid The Problem Of Bankruptcy

2012 March 20

Unless you cannot avoid it, applying for bankruptcy should be the last option. It is a process which is only considered in worst of worst times. The federal court usually authorizes the process and the applicants are given the freedom to reorganize or disregard some of their debts by selling their assets or even following the repayment plans. The process is known to be initiated through different plans depending on the financial health of the debtor. It should be your last option because of the following reasons.

If you happen to take this option, you credit will be hit badly with negative balances. Your credit score will badly be brought down and you will only have a negative record in your credit report for a period of 10 years. When this happens, you will never qualify for any new credit services or loans until 4 years are over.

If you do not want to lose your adorable property to the creditors, you need to surely have this as your last option. The property is taken and sold so as to repay your debts as provided in the agreement papers. While you may not afford to see your beautiful car and house being sold, this is likely to happen depending on the state in which you live and the laws of the land.

By choosing to have this enemy, you will not have eliminated all your debts. The misconception that bankruptcy will exempt you from all your debts still remains mythological. Back taxes, spousal/alimony support, student loans and other minor debts will still remain. If you do not want to be in problems, stay away from applying for bankruptcy. It is advisable to negotiate alternative payment plans with you creditors instead.

You risk having your property repossessed by your creditors. Any creditor whose amount has not been cleared 30 days from the time of filing will legally be authorized to sue you. This will lead to you property being repossessed. In addition, you will not escape from your personal responsibilities such as repaying your mortgages and loans in case you decide to keep your property.

Your chances of qualifying for any loans will be diminished. You may have to wait for up to 4 years until you lawfully become eligible to make an application for secured loans. Even if you made a choice to take unsecured loans, it will still be difficult to qualify.

Also under risk is your own financial status which will have to be negatively affected. You will not have the capacity to even rent a car or a home. This is because your security will be limited. The situation is made worse if you fail to inform your employer.

Lastly, not every retirement plan can be protected. This however depends on the exemption laws of your state. Your social security, government pension and any other retirement benefit scheme can be tapped in order to repay your unsettled debts. You need to find ways of protecting your retirement savings by trying to avoid bankruptcy. Otherwise, you will be faced by all these misfortunes if you make wrong moves.

Lower rate car, home, and personal loans available for people with bad credit, no credit or bankrupt across the GTA. Visit Prudent Financial Services 1150 Sheppard Ave W, North York, ON M3K2B5 after bankruptcy

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