You’re probably aware of the possible consequences you’ll have to deal with after you file for bankruptcy. Your credit score will be damaged for at least 10 years, and your reputation in society (even with your family members and friends) may be strained. But most of the time, not filing for bankruptcy is much worse. Here are some of the consequences of not filing for bankruptcy.

Your Assets May Be Repossessed.

When you can’t make payments on time, such as on your car, then the lending company can repossess it, leaving you with nothing. But even then, you still owe them money — repossessing doesn’t cancel your obligations. This is where bankruptcy can come in — it buys you more time to get your finances in order.

You May Lose Your Home.

The same thing can happen to your home — the bank or mortgage holder can foreclose on it if you can’t make the payments on time. Bankruptcy can also prevent this for a time, and can also protect your house from unsecured debt.

But remember that bankruptcy only prevents the foreclosure — it doesn’t absolve you from your obligations. You’ll still need to pay for the house soon. In these situations, a Chapter 13 bankruptcy can help restructure your debt, helping you catch up on your mortgage payments before losing your home completely.

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You may already know about some of the common disadvantages of filing Chapter 7 bankruptcy, such as giving up your assets for liquidation or dealing with a bad credit rating for the next ten years. But here are some more personal or emotional consequences that you need to be more aware of.

It’s easy to be unaware of the emotional ramifications of filing bankruptcy. For instance, the members of your family, such as your elders, may not like the idea of one of their own filing for bankruptcy.

Of course, that doesn’t mean they should be happy at the turn of events, or that you really shouldn’t deal with the ramifications. Sometimes the situation really calls for filing a Chapter 7 bankruptcy, since there’s no other way out of the trouble.

The fact remains — once you’ve discussed the problem with your financial adviser or bankruptcy attorney, it may be likely that Chapter 7 bankruptcy is really the best way to keep your finances afloat over the next few years. Just remember that family members may not like the idea, and you might deal with some negative feedback from your own kin over the next few years.

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Bankruptcy offers a way out for those who don’t have any other means of solving their financial troubles. To those who are smart enough to plan ahead and plot out their road to recovery, bankruptcy can be a financial rebirth. But let’s face it — not everything about bankruptcy is great, and there are certain consequences you’ll likely have to deal with for a while.

There are actually two ways out of financial trouble — Chapter 7 and Chapter 13 bankruptcy. You’ll need to know the advantages and disadvantages of bankruptcy to go into things with both eyes open.

First of all, remember that you stand to lose your assets.

When it comes to Chapter 7 bankruptcy, you’ll be forced to liquidate all your non-exempted assets to pay your debts and bills. The thing is that those who apply to Chapter 7 don’t have many assets to begin with. If that sounds like you, then you may not have to give up most of what assets you do have left.

But be careful — you may also stand to lose your home after you file for bankruptcy, or at least lose most of its value.

Homestead exemptions vary from state to state, so it’s always a good idea to discuss this issue closely with your bankruptcy attorney. This is important if you don’t want to lose your house just by filing bankruptcy.

Secondly, remember that bankruptcy is a black mark on your public record.

Bankruptcy will always have an effect on your financial standing in society. In most cases, people may look at you as financially irresponsible. But don’t let this negative image stop you from filing, especially if your money problems are so huge that there’s no other way out besides bankruptcy. In these cases, you really shouldn’t worry what other people think.

If you live in a place where there are lots of people, people probably won’t notice that you filed for bankruptcy. But creditors and banks will probably notice once you try to do business with them again. It’ll take a while before they can trust you again, but if you’re sincere in recovering financially, they’ll warm up to you eventually.

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