So i have a friend talking about she is tired of her debt so she's thinking about filing for bankruptcy so she can start over. My question is, is bankruptcy bad or good? I'm not exactly sure how it works or know much about it is why i joined this forum so i could learn more but i thought bankruptcy was a bad thing so why would someone want to file for bankruptcy if they don't have to? Exactly what happens when you file for bankruptcy?
Filing for bankruptcy is never really a good thing, but it can be a solution for someone as a last resort. Basically, your debt is forgiven and you can essentially get a fresh start once you successfully go through the process. You would have to meet with a lawyer and determine if it is the best financial decision for you and if you want to file Chapter 7 or Chapter 13. The problem that most people have with bankruptcy is that it stays on your credit report for up to seven years and it can really put a dent in your credit rating. It could be hard to obtain a loan or it could mean high interest rates. On the other hand, with more and more people filing because of the economy, I don't feel that it's looked down upon as much as it once was. I know people who have filed for bankruptcy and then went on to buy a house soon thereafter. It's a very big decision wherein the pros and cons should be weighed carefully and discussed with a professional.
