Pros and Cons of Bankruptcy: Which Way Should You Go?

Pros and cons to Bankruptcy

The fact is that you shouldn’t become bankrupt just because you’re struggling with debts. Like I said before, this should only be used as your last resort. The reason for this is because you may be required to give up most of your belongings as a result of it. Some of these might include; salary and any investment in your house.
 
If you own any property or shares in businesses these may have to be sold to pay back the money you owe as well. This means that you could lose your family’s house should you decide to go bankrupt. Even if it is jointly owned by you and a spouse or parent, you may be forced to sell it so your share of the proceeds can be used to repay debts.

I will say though that under new rules, if the trustee that is appointed by the court has not sold the bankrupt’s home within three years, it no longer counts as part of the estate and may not be reclaimed by you. I wouldn’t hold my breath though. This isn’t all you could lose either. If you come into any money while the bankruptcy order is still in place, this could also be taken away from you. This money could come from the lottery, or an inheritance. Of course, you could also find yourself credit blacklisted for up to 15 years. So you should really think before filing for bankruptcy.
 
Bankruptcy is best for someone with considerable debts, no income and no assets.
The people it has the highest effect on are those that actually have equity in property, disposable income and people that have professional qualifications because they stand to lose the most. For example, a lawyer should try to avoid it because they won’t be able to practice law once they have filed for bankruptcy.