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Why is any form of bankruptcy most often considered a last resort?

User Roy K
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In the end, bankruptcy should always be considered a last resort. Choosing to seek the protection of the Bankruptcy Code is a serious decision. While the Bankruptcy Code may help alleviate your debt, the choice does not come without consequences. First of all, bankruptcy petitions are public information and may be published in local newspapers. Many people feel uncomfortable with their private financial difficulties being exposed to the general public. Filing bankruptcy will also be reported to most major credit bureaus. Second, you and your financial affairs will be subject to scrutiny by your creditors and the Bankruptcy Court. Many financial decisions will require the approval of the Court. Finally, particularly when filing for protection under Chapter 7, the person may have to bear the loss of many of his assets.

User Gobot
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Once you file bankruptcy, you are considered a high-risk consumer and lenders will be leery of lending to you, which makes it almost impossible to get approved for any loans. That means any hope of owning a home, renting a place to live, or buying a car will be extremely difficult for at least five years. If you are approved for a loan, more than likely you will be offered extremely high interest rates and pay twice what the product or service is really worth. Over time, paying such high interest rates for approved loans and credit cards that are needed to help rebuild your credit will cost you lots of money.

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User Erikrunia
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