Many people in America end up dealing with some form of debt. But, at times, debt can become overwhelming to a point that it forces people into bankruptcy. While some people may feel that there are benefits to filing for bankruptcy, any benefits there may be are heavily outweighed by the disadvantages that bankruptcy can bring. If you are in financial trouble, you should consider carefully the disadvantages of filing bankruptcy and do your best to avoid it.

7 Years of Effects

One reason that it is important to avoid bankruptcy is that bankruptcy will stay on your credit report for seven years. Anytime people view your credit report they will see that you have filed bankruptcy. Whether you are applying for a job, trying to get financing, or even a credit card, bankruptcy will keep on effecting your life for years to come. You may think it is a quick fix to your problems, but remember that it will be effecting your life for seven years.

Costs of Bankruptcy

Another reason that you will want to avoid bankruptcy if at all possible is the court costs and fees that are associated with bankruptcy. Usually, the court costs and the fees for the lawyers are taken out of the sale of assets and property of the person filing bankruptcy. It is important to note that filing bankruptcy will cost you more than you care to pay. In fact, it will probably cost you almost everything you own.

Loan and Mortgage Difficulty

It can be quite difficult to get approved for loans and mortgages after you have filed for bankruptcy. While there are a few places that will provide you with loans, most of them have extremely high interest rates associated with them. Even a few years after your bankruptcy, many lenders may be hesitant to offer you financing for anything because of your past financial record. If you need a home or you need a personal loan for any reason, filing for bankruptcy can keep you from getting the loans you may need.

Press

Not only will you lose your assets, pay for costs, have seven years of effects, and difficulty borrowing money, but you will also have to face the stigma of having your name placed in local papers letting everyone know that you have filed for bankruptcy. This can be quite demoralizing and embarrassing and can cause you future problems with finding a job or finding a place to live. No one wants to have their financial problems broadcast to neighbors and business acquaintances. So finding other ways to resolve financial problems is the best idea.

These are just a few of the disadvantages of filing for bankruptcy, and there are many others including the loss of inheritances, closing of bank accounts, and business losses. Before it is too late, you need to make sure that you take control of your finances so you can avoid filing for bankruptcy and the many negative consequences that come along with it. While bankruptcy is there as a last resort, it is important that you not file for bankruptcy unless absolutely necessary to avoid these disadvantages.