subject: Filing Bankruptcy - Why Bankruptcy Should Always Be Your Last Option [print this page] The anomaly of recession in the natural flow of US economy led to a situation where thousands of people lost their jobs. Because they lost their jobs, they failed to repay the debts that they have and hence, they became defaulters. The upshot that followed was a chain of bankruptcy filing in order to get out of the debt disaster. The sequel of this is even worse! Those who filed for bankruptcy lost a healthy financial life! It is because of this reason, bankruptcy filing should be the last option for everyone.
The Aftermath of Filing Bankruptcy:
It is true that the method of bankruptcy is crafted carefully to wipe out the debt in FULL. When I say full, it means that you don't have to pay a single penny to your creditors. But there are certain modifications in your financial life which have effects percolating right to the rock bottom of your personal life where emotions play a paramount role! It is therefore, important that you don't ado that aspect and avoid bankruptcy if possible. The aftermaths of filing bankruptcy are mentioned below:
The moment you file for bankruptcy, your credit score takes the hit and your credibility is lost. Mind it...it is credibility and not credit ability. Well, credit ability is lost when you are fully laden with secured and unsecured loans and you don't have ample income to cover yet another loan!
When you lose credit score, the same gets reflected in your financial history which is stored and maintained by the three credit bureaus namely Equifax, Experian and TransUnion. The moment you file for bankruptcy, these three credit bureaus update the same in your credit history and your FICO score falls steeply!
The record stays in your credit history for the following 7 to 10 years. The creditors will have the same report or if they don't have, they will simply get the report from the bureaus before they grant credit to you (in case you apply for one). The creditors will simply turn you down after having a look at your report. This means that you are not eligible for any further loan during the period of 7-10 years.
After that period, you will get back your credibility but the effect will continue to stay. You will then become sub-prime consumer. This means that new credits will be available for you but the rate of interest that you need to pay will be more than what others (who do not have a bankruptcy report) pay.
It is during these 7 to 10 years that your financial as well as personal life will take a severe hit and happiness will be lost in a vastness unknown. It is therefore said that filing bankruptcy should always be your last option.
Debt settlement is a legitimate alternative to filing for bankruptcy. There are also other debt relief options available which is why it would be wise to speak with a debt relief specialist.
Filing Bankruptcy - Why Bankruptcy Should Always Be Your Last Option
