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The potential financial benefits of filing for bankruptcy

Many New York residents view filing for bankruptcy as a desperate last resort that only those who have exhausted all other options would even consider. However, some financial experts say that the social stigma surrounding bankruptcy is misplaced, and they argue that taking this course of action often makes a great deal of financial sense.

Individuals struggling with an unmanageable financial situation are not short of debt relief options. Most of these options involve structuring repayment by either consolidating debt or negotiating a reduction of debt with creditors. While paying back debts that once seemed daunting can provide a certain degree of pride and accomplishment, many borrowers fail to understand that the money spent on repayment could be used more prudently if the debt concerned had been discharged as part of a Chapter 7 bankruptcy.

Some argue that a Chapter 7 bankruptcy filing has a negative impact on credit and makes future borrowing difficult, but these same arguments can also be made about other forms of debt relief. What these other options cannot do is eliminate the need to make payments. This money can then be placed into a retirement account or used to fund further education or vocational training.

An attorney with experience in bankruptcy law will likely understand that individuals struggling to make ends meet are often primarily concerned with immediate problems and short-term consequences. The attorney could explain the benefits and possible drawbacks of the various debt relief options available and thus help those with financial problems to see the possibilities offered by a financial fresh start. The attorney could also explain the immediate benefits of filing a bankruptcy such as putting an end to harassment from creditors.

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