When you find yourself in a financial situation that cannot be sustained, one of your ways out of your current financial situation is bankruptcy. Bankruptcy is a chance to satisfy your creditors and move forward with healthy financial habits. Owing money can eat away at your life, and with bankruptcy, it doesn't have to.
Bankruptcy Goes on Your Credit History
When you file for bankruptcy, it is not a private act. The fact that you filed for bankruptcy will go on your credit report and may appear on your credit report for the next decade. When you file for bankruptcy, you need to know that this is a public act that you may have to talk about over the next decade when you apply for car loans, home loans, and other financial assistance.
Bankruptcy May Not Harm Your Credit Further
Usually, when you are at a place where you are considering filing for bankruptcy, you are already in a tough financial situation. You may have late and missed payments on your credit history as well as charge-offs. If your credit score is already really low, filing for bankruptcy may not end up lowering your credit score that much more.
As a matter of fact, you may find that after filing for bankruptcy, your credit score starts to go up as debts are forgiven and you have a chance to build up a positive history of paying your bills.
Bankruptcy is Only for You
When you file for bankruptcy, you are filing for individual protection unless you are married and you both file bankruptcy together. That means if you had a parent, aunt, or another adult sing on a loan, during the bankruptcy process, your name may end up coming off the loan and the debt may become that of the co-signers.
If you co-signed on any loans, think carefully about how your bankruptcy will impact the co-signer on the loan and if there is anything you can do to assist with that impact.
When You File Matters
When you file for bankruptcy matters. If you are currently in a tough financial situation, you may want to consult with an attorney to see if you should file now or wait. For example, if your house is being foreclosed on, it makes sense to file right away so you can stop the foreclosure process with a Chapter 13 bankruptcy and come up with a plan to get back on track with your mortgage. On the other hand, if you experiencing a medical emergency, and the health bills are still coming in, it may make sense to wait for all the bills to come in before you file for bankruptcy so that all that debt can be addressed at once.
The best way to determine if bankruptcy is right for your situation and when you should file for bankruptcy is by having a consultation with a bankruptcy attorney. Many bankruptcy attorneys offer consultations for free.
Share28 September 2018
I was blessed to have grown up in a home with loving supportive parents. They both worked extremely hard in order for me and my sister to enjoy a better life than they had. Financially, they bought me a new car when I was sixteen. They also paid for my college expenses. Many parents do the same for their kids. They want to provide for them in the present while safeguarding their futures. One way parents can invest in their kids’ futures is by placing money in trusts that their children can utilize when they reach a certain age. A reputable attorney can establish beneficial trusts for your kids. On this blog, you will learn about the benefits of consulting with an attorney about setting up trusts for your children.