Don’t file for Bankruptcy: How Financial Warranty Can Help
                     Don’t file for Bankruptcy: How Financial Warranty Can Help 
When you are falling behind on your payments you may feel overwhelmed, frustrated, and in
some cases even scared because you have no idea how you are going to  pay back your
creditors. You may find yourself considering bankruptcy. But, believe it or not, bankruptcy can
be a smart financial decision in certain situations. Bankruptcy’s designed to give people a fresh
start when they need one. And if you file for bankruptcy, there is no shame in doing so, you’re
taking a big step towards getting your finances under control.
But keep in mind that filing for Bankruptcy is a serious decision with serious consequences,
your credit rating takes a big drop and your spending habits may need to change. Even though
bankruptcy will fall off your credit report after 7-10 years, it is always better to pay off your
debts rather than file for bankruptcy. A bankruptcy filing could also have an impact on your
emotional life or your personal life. People who have filed for bankruptcy report feelings of
regret and failure years after filing.
What is Bankruptcy?
Bankruptcy is a legal proceeding involving a person or business that is unable to repay their
outstanding debts. The bankruptcy process begins with a petition filed by the debtor, which is
most common, or on behalf of creditors, which is less common. All of the debtor’s assets are
measured and evaluated, and the assets may be used to repay a portion of outstanding debt.
Things to keep in mind:
• Bankruptcy is a legal proceeding carried out to allow individuals or businesses freedom
from  their  debts,  while  simultaneously  providing  creditors  an  opportunity  for
repayment. 
• Bankruptcy is handled in federal courts, and rules are outlined in the U.S. Bankruptcy
Code. 
• There are various types of bankruptcy, commonly referred to by their chapter within the
U.S. Bankruptcy Code. 
• Bankruptcy can allow you a fresh start, but it will  stay on your credit reports for a
number of years and make it difficult to borrow in the future. 
Negotiating with Creditors
Creditors would rather settle a debt with you than have it discharged in bankruptcy. It may be
easier  to  negotiate  a settlement  if  you’re  already a few months  late  on the payment.  At
Financial Warranty, we advise all of our clients to consider all of their options before making a
final decision. We assist our clients by dealing directly with their creditors and negotiate on
their behalf to arrive at a resolution. Bankruptcy is a last resort, but that does not mean there
is no other option and it shouldn’t be your only option. Finding the perfect financial consultant
for your case is a step in the right direction. A financial consulting company that can help
you resolve your financial obligations is what you need and this is where we come in. Other
companies that deal with debt may tell you that filing for bankruptcy is your only option, and
then you are forced to pay them large amounts of money to handle your case. Stop right
there!
Financial Warranty, takes each client as a unique case and offers them guidance and step by
step instruction on how to better handle their debt and what their options are for resolving that
debt. Say goodbye to stressful debt solution companies that make promises they can’t deliver
and financial plans that sound complicated, at Financial Warranty, we make the process easy!
Create a Budget to Pay Down Debt
Often, a debtor’s problems can be resolved by learning better money management strategies.
Using credit counseling and budgeting, you may be able to reduce expenses, find new income
sources, and sell assets to pay down your debt. This will help you learn new strategies that will
reduce  your  debt  now and  help  you  manage  your  finances  in  years  to  come.  Seeking  a
reputable and experienced  debt relief company is a good starting point and at Financial
Warranty, we don’t give one-solution options, we offer a variety of money management and
debt repayment strategies, that can give you the assistance you need to be able to hand your
money better.
Pros and Cons of Bankruptcy
Bankruptcy carries with it, considerable consequences that you need to keep in mind and this
should not be taken lightly, as Bankruptcy can impact your financial future for years to come.
Here are some advantages and disadvantages of Bankruptcy:
Advantages of Bankruptcy
• No longer legally required to repay debt 
• The collection calls and letters stop 
• No stress over possibly getting sued 
• You’re not liable to pay taxes on forgiven debts 
Disadvantages of Bankruptcy
• Bankruptcy appears on your credit report for 7 years 
• May have to repay to 50% of debt if a Chapter 7 isn’t granted 
• Negative accounts will show “Included in Bankruptcy” 
• Negative accounts still appear on your report and hurt your score 
• Credit score will drop significantly 
• Could cost thousands of dollars to hire a bankruptcy attorney 
• Will not be able to obtain new credit for years after a bankruptcy 
Should I file for Bankruptcy?
This depends on your financial situation and what you are willing to settle for, but Bankruptcy
should only be taken as a last resort if you absolutely cannot repay back your debts. On the
other hand, if you are facing unpaid medical bills or other collection accounts, then bankruptcy
is  not  always  the best  answer. If  you are  undecided,  or  thinking about  what  options  are
available to you, Financial Warranty is here to help!