It is essential to consider the full implications including the advantages and disadvantages when considering the move to file for bankruptcy over other debt relief services. Bankruptcy is best suited for those who have a considerable debt problem, are completely unable to pay off their debts, and only have a few assets. On the other hand, bankruptcy can be particularly dangerous for those who have a substantial amount of assets. It is important to remember that your bankruptcy will be publicized, which may ruin some of your personal and business relationships.
There are significant advantages to bankruptcy over other debt relief services when you have a large amount of unsecured debt. Bankruptcy can help you to discharge the majority of this debt in a limited period while offering you legal protection. You will also be able to keep your driver’s license even if you have unpaid debt because of a vehicle accident. It is unlikely you will find other debt relief services offering this option.
Bankruptcy puts you under the control of the court leaving you at risk of losing any assets you have that are not necessary for domestic or employment reasons including property and income. You will also need to put electricity, gas and telephone contracts into the name of another adult at the same residence or prepay these services. Furthermore, you will lose your current bank account and be forced to hold only a basic account that has no overdraft and other limitations.
The disadvantages incurred from filing for bankruptcy are not found in other debt relief services so it is important to consider whether the advantages outweigh the problems. Additionally, bankruptcy can have more serious credit implication than other debt relief services. While most people in debt suffer from bad credit ratings and are subject to high interest rates, this can last up to 10 years after filing for bankruptcy and can even affect chances of employment.