What Happens When You File Bankruptcy?

Often thought of as the end game, bankruptcy is there for people undergoing tough economic times. But with it comes the opportunity to restore order to your finances and maybe a fresh start. There are negative results from filing for bankruptcy, so read on to learn more.

What Happens?

Bankruptcy gives you the option to pay down a percentage of your debts over a set time period or have some totally eliminated. An automatic stay is granted preventing creditors from collecting money from you or pursue your other assets. People ask if they will lose their property. In Chapter 7 you will most likely need to sell some or all of your assets while in Chapter 13, you do not have too as your debts will be reorganized in a manner you can pay them off in full or partially over  a three to five year span. But if you do not maintain the arrangements, creditors will, most likely, come after you.

Credit And Bankruptcy

Once the bankruptcy has been discharged, it may be difficult to obtain credit. That said newer good habits with credit will help you maintain a better credit score over time even with the history of bankruptcy. can certainly cause great damage to your credit score. Chapter 7 can remain on your credit report for up to ten years as it involved the elimination of debt. Chapter 13 is a little more favorable as it still shows some effort to pay off debt and will be on the report for seven years.

Are Filings Available To The Public?

Although a public record, they are registered with a system known as PACER, mainly used by creditors and attorneys – but anyone can register to use it. Sometimes local newspapers publish notices as well and it may be visible on your credit report.

Job Prospects

Nearly a third of employers run a credit card on job applicants so declaring bankruptcy may be seen as a negative when applying for jobs in certain career fields. However, a bankruptcy will not show up in a regular criminal check.

Keeping Track Of Credit

As your credit is impacted by bankruptcy, keeping tabs on your credit scores are very important. Watch for how certain transactions can take a toll on your credit score and seek out possible errors or information that may negatively impact your scores. If you discover them ,they may always be disputed with the credit agency.

Source: https://www.experian.com/blogs/ask-experian/what-happens-when-you-file-bankruptcy/