Consequences of filing bankruptcy

Many Americans are aware that filing bankruptcy will have impact on credit score

negatively but fail to understand the in depth impact of bankruptcy and its consequences associated with this action. If you are the person thinking to file bankruptcy for getting rid of debt, read further to know the consequences that you may face after filing bankruptcy. Taking informed decision is most important when it is going to have tremendous impact.

Chapter 7 is most popular option for a people who want to get rid of debt, can stay on your credit report for al most 10 years but stay on public records for 20 years which is very disgusting. This has a impact when more and more employers performing credit and background check during your job change can ruin your chances of having better job. In fact this impact will have its touch for many years down the road.

Any type of bankruptcy you file chapter 7 or chapter 13; it will stay on your credit and public reports and will impact on your credit acceptance in future. Acceptance of credit is not as easy as it was before bankruptcy is filled and also it lot depends on the line of credit you are going to open. Once the file of chapter 13 or 7 has been accepted, the petitioner must start form scratch and re-establish credit. May be to open line of credit, creditors require assurance like secured credit cards in which you have to deposit amount in order to use it. The amount card holder can utilize will be limited to amount that is deposited with secured credit cards.

The other consequence of bankruptcy is his/her inability to buy a home in near future, mostly for at least two years to come before he is deemed eligible for a new home loan. In case of person files chapter 13 bankruptcy, then he needs to wait for twenty four months before he applies for a new home loan after the debt is cleared under repayment plan.

The best way to re-establish credit is to have one or more secured credit cards. It is the best way because credit cards and store cards often accept the people with bad scores histories but the thing is they charge higher interest rates and with low limits.

Lose of assets is the other consequence of filing bankruptcy. You can risk losing your home or any other valuable assets that you posses and some percentage of you income for at least 3 years from the date of filing bankruptcy. After loosing valuable assets at the same time having poor credit on your credit report will leave you nowhere regarding your finance. This situation will even impact your personal relationships. Financial strain will cause a break in your relationship. It has been reported that many marriages are failed due to lack of money.

Got terrified with the consequences? In order to weigh your financial situation that leads bankruptcy contact any reliable credit counsellor to review your assets and liabilities.

Consequences of filing bankruptcy

By: Jack Bronson

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