Bankruptcy Versus Staying in Debt: The Pros and Cons

While bankruptcy may sound like a scary word, it can actually be one of the best choices you can make for your future. That all depends on your individual circumstances such as your age, how much debt you have, the type of debt, who you owe money to and your income. Let’s look at the pros and cons of staying in debt versus bankruptcy.

Tackling your debt on your own has both its good and bad points. If you can create a plan for yourself where you are able to communicate with your creditors, agree upon repayment amounts that you can afford and actually reduce your debt over time, that’s great! This hopefully means your credit score won’t be affected and, in time you will be debt free. In some cases, however, this isn’t always possible. Credit card companies, for example, may encourage you to make minimum repayments which may sound good at the time, but in fact will keep you in debt for longer as you continue to pay interest and don’t actually get the amount down.

Filing for bankruptcy, while it does mean your credit score will be affected for a period of time which comes with certain restrictions, it can improve your circumstances both now and in the future. This immediately stops your creditors from calling you, chasing you for money which improves your quality of life and greatly lowers your stress levels. Another thing to remember is that bankruptcy doesn’t mean you will never own a home, this is a myth!

So if you are facing trouble with debt of any kind, before attempting to arrange repayments yourself, enter into a Debt Agreement or filing for Bankruptcy, ensure you seek independent financial advice from Bankruptcy Debt Help can provide you with the guidance and knowledge that you require at this difficult time. To find out how we can help, contact our friendly team of experts today! We can offer out assistance and services Australia wide.