What are the advantages and disadvantages of bankruptcy?

Bankruptcy offers a break from creditors. A significant advantage of bankruptcy is that it provides both temporary and permanent relief from creditors. An “automatic stay” prevents them from attempting to collect money from you while the bankruptcy is pending and provides temporary protection from foreclosure, eviction and car repossession.

What are the benefits of bankruptcy?

One of the largest benefits of bankruptcy is that you could be legally cleared of responsibility for your debt. On top of that, it could potentially prevent any future legal trouble related to the nonpayment of that debt. Keep in mind that not all debts are dischargeable, but most forms of unsecured consumer debt can be wiped out in bankruptcy.

What are the pros and cons of filing for bankruptcy?

While this route can alleviate an excessive financial burden, there are pros and cons of filing for bankruptcy. For instance, while it can provide you with a fresh start, it can make it difficult to be eligible for new forms of credit down the road.