Chapter 7 Bankruptcy is a quick and easy process to resolve a household budget ridden with credit card or medical debt, but is it better to pay off your debts than to have them discharged in bankruptcy?

Credit Score

The concern obvious to most is that Bankruptcy is going burden a person’s credit score for the length of time the record remains on their credit report. The formula to determine a credit score is not disclosed so that it is difficult to provide a well-informed opinion. However, a bankruptcy can initially help a credit score if a lot of debt is being discharged, especially if the accounts being discharged are delinquent. The detriment of a Bankruptcy on a credit report will more likely relate to how high the score can reach in the future.

Saving Money

The capacity to save money is better than an immaculate credit score. It may take years to pay tens of thousands in credit card and medical debt that could otherwise be discharged in months. The discharge grants more feasibility for a household to save money that would have otherwise gone towards debt and interest payments. The savings would then be available in the event of an emergency so that debt does not need to be incurred and the credit reporting system will be avoided.

Conclusion

It’s good to pay back borrowed money, but we have an obligation or ourselves and our families to do what is in our best interest. Having a good credit score to obtain a loan at a reasonable interest rate is nice, but having the capacity to avoid the credit system is a form of financial freedom.

Free Consultation

There are many considerations with respect to Bankruptcy too numerous to include in a brief publication. Bankruptcy is a practice suitable for an experienced debt relief attorney like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that a person not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
 
If you would like to consult with experienced Debt Relief Attorneys contact Smith Law, Ltd.

We are a debt relief agency. We help people file for Bankruptcy relief.