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Posted by: Maricopa Lawyers on Sep 19, 2013

If you’re one of the thousands of Americans that’s accrued overwhelming debt, you might be wondering why filing for bankruptcy benefits you. You’re aware of the obvious consequences to your credit but feel bankruptcy could provide an immediate solution to your debt. After weighing your options, how do you know if bankruptcy is right for you?

There are a few circumstances in which filing for bankruptcy has a distinct advantage. Perhaps you’ve already tried negotiating your way out of the red to no avail. Some creditors won’t budge when it comes to repayment options. When creditors seek repayment you can’t accommodate, bankruptcy presents itself as the most realistic solution.

It’s easy to find yourself underwater as your debt continues to grow. Many people are pushed into bankruptcy when their financial liabilities eclipse their personal assets. The monthly payment you’re required to make might exceed the monthly payment you’re capable of making – if the cycle continues indefinitely, bankruptcy might be the only way out.

Some people worry their IRA will be affected by filing for bankruptcy, liquidated to creditors to resolve their debt. Thankfully, the Supreme Court ruled individual retirement accounts are shielded from creditors. Bankruptcy status will not affect your ability to retire later on in life.

There are plenty advantages associated with bankruptcy depending on your situation, but it’s necessary to fully consider the negative side before filing.

Filing for bankruptcy will prevent you from borrowing money in the future. Obtaining lines of credit is extremely difficult for bankruptcy filers. This difficulty obtaining credit generally occurs for several years. Credit agencies have the ability to report a bankruptcy over the course of 10 years. These bankruptcies can even affect your employment in the future.