Bankruptcy can be hard to understand on several levels. There is the legal aspect to federal bankruptcy law, which is complex for non-attorneys to follow; there is also the question of -- other than elimination of some debts through discharge -- what its real impact is on the lives of those who experience it. Some studies suggest, though, that you should think carefully about the long-term consequences of bankruptcy before you elect to use it as a remedy.
Most people are at least basically familiar with the reality that a bankruptcy will stay on your credit record for several years, and that in turn will make it harder in some cases to either qualify for consumer or business credit or to secure the best possible rate of interest. But the effects of bankruptcy can go deeper than just effects on one's credit rating.
For it's promise of a "fresh start," bankruptcy can exact a significant price. One study that compared those who have filed for bankruptcy protection to those who have not concluded that bankruptcy filers do eventually catch back up with their non-filing counterparts in areas of savings, total income, home ownership and net worth, but that the time it takes to do so can range from more than a decade up to a quarter-century.
It is not the purpose of this post to discourage anyone from considering bankruptcy as a means of relieving an unmanageable debt situation. Making use of bankruptcy protection can present both short and long-term advantages to both individuals and businesses. It is the point of this post to recommend that if you live in the Pittsburgh area, before making any final decision about bankruptcy, you should consult with an experienced local bankruptcy attorney to help you to thoroughly understand all of its potential effects on you in the years ahead.