Are there tax consequences to filing bankruptcy?

The consequences of filing bankruptcy tend to deter people from filing, although they are so far in debt they need the relief.

It is important to weigh the pros of filing bankruptcy against the cons in that letting debt linger can result in wage garnishment, liens on bank accounts, and much more. Fortunately, bankruptcy is carrying less of a stigma than it once did, as individuals are realizing that circumstances can change and that can result in an inability to pay any or all of the debt that a person may have.

Weighing The Pros And Cons

It is true that bankruptcy does stay on your credit report for 10 years. However, it is possible to restore your credit score in as little as two years. There are many individuals who have been able to buy new cars in as little as six months and others have bought homes within two to three years after the discharge of their bankruptcy.

If your wages are being garnished, garnishment stops. If you are in the middle of a repossession or foreclosure, those activities stop as well. Creditors can no longer call you. In other words, life suddenly changes for the better after you file.

It is true that the local newspaper may print bankruptcy cases, but not all do. As stated before, there is less of a stigma attached to bankruptcy, so most individuals do not read that section or they simply do not care.

The U.S. Bankruptcy Code also prohibits employers and landlords from discriminating against a person because they have bankruptcy on their credit report.

You can review these pros and cons with your Minnesota bankruptcy attorney as they apply to your situation so that you can see how things will change for you.

Bankruptcy Vs. Bankruptcy Alternatives

If you still wish to seek out bankruptcy alternatives because of the consequences related to bankruptcy, you can choose debt negotiation so that you can settle debts with creditors. If a mortgage is your problem, then you can have your Minneapolis bankruptcy lawyer negotiate a loan modification with your lender. Depending on the circumstances surrounding the loan, it may be likely that new terms can be established so that you are brought current on the loan. Sometimes this involves simply adding a few months to the end of the loan.

Nonetheless, financial problems that cannot be fixed should be taken before the bankruptcy court so you can start over after your debts are discharged.

Contact A Minnesota Bankruptcy Lawyer

If you are thinking about filing bankruptcy and you wish to consider the consequences, it is important to talk to a qualified bankruptcy attorney as soon as possible so that you can weigh the pros and the cons based on your unique situation. Your attorney will review your assets, debts, and income so that you can see what bankruptcy can do for you. To find out more about how the McKinney Law Office can assist you, call the Minneapolis office at 612-206-3706 or the St. Paul office at 651-379-4110 for a free consultation.

This law firm is a debt relief agency, and we help people file for bankruptcy relief under the United States Bankruptcy Law.