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This video is brought to you courtesy of Louisiana Debt Relief .org.

Bankruptcy Pros and Cons

Bankruptcy is generally considered to be the debt relief option of last resort. There are several types of bankruptcy: Chapter 7 (straight bankruptcy or liquidation), Chapter 13 (reorganization of debts), and Chapter 11 (debt reorganization normally used by a business or partnership). While a successful bankruptcy can provide a fresh financial start – individuals or businesses should carefully consider bankruptcy before proceeding because of its long-term financial implications.

Pros

Debtors given a fresh start – a new financial lease on life
Upon filing Chapter 7 or 13, collection efforts must stop
Debts discharged. Creditors forgive most unsecured debts
Your home, auto, and other essentials may be protected
Wages you earn after bankruptcy go to you, not creditors
From bankruptcy filing to relief takes about 3-6 months.

Cons

Bankruptcy stays on your credit report up to 10 years
Makes it difficult to obtain credit for home, auto, and more
Requires forfeiture of your existing credit cards
You lose property not exempt from sale by trustee
Doesn’t discharge student loans, tax debt, alimony
Debt option of last resort that can be embarrassing