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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