Why You Should Not File Bankruptcy
If you are unable to keep up with your monthly bills, bankruptcy may be a tempting option. Bankruptcy may be a reasonable solution for persons who would not be able to pay off their debts within five years. For many people, however, personal bankruptcy leads to a lower credit score and loss of assets and property that can be avoided with budgeting and debt consolidation.
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Reduction of Debts
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Many times, persons who file bankruptcy can pay off their debts in two to three years using a debt consolidation service, which can help eliminate penalties and interest.
Lower Credit Score
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Filing bankruptcy can cause more damage to a credit score than consolidating and paying off debts, which leads to higher interest rates on mortgages and car loans.
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Loss of Property
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Persons who file bankruptcy may lose their house, car, jewelry and other personal property.
Career Ramifications
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A low credit score resulting from bankruptcy may prevent people in certain professions from getting a job.
Cost
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Legal and filing fees for personal bankruptcy may be up to $1,000. For persons with small amounts of debt, filing bankruptcy may be more costly than paying off debts over time.
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