What Is The Downside Of Filing For Bankruptcy?
You can obtain a new financial start with bankruptcy, but it is a matter to be taken seriously. Understanding the decisions, you make may have consequences is especially important before you commence bankruptcy.
Long Time Effects
When you apply for a loan of $150,000 or more, your bankruptcy will appear on your credit report for longer than the standard ten years. How this impacts your credit will be determined by your credit status prior to filing. If your credit was poor it will not matter as much, if it was good, it may cause a severe decline in your credit score.
Sometimes bankruptcy can help you improve your credit score more rapidly than people who do not file for bankruptcy. By addressing your debt to income ratio, paying bills on time, and developing a positive financial outlook as opposed to not filing and mounting up late payments, repossessions, and delinquencies.
Mortgage And Car Loans
You will have to wait for a while when you have filed bankruptcy to obtain a car loan or a mortgage and more than likely you will have higher interest rates to pay on the loan.
- When completing a Chapter 7 Bankruptcy you cannot get another for eight years.
- When completing a Chapter 7 Bankruptcy you cannot obtain a Chapter 13 Bankruptcy for four years.
- When completing a Chapter 13 Bankruptcy you can’t get a Chapter 7 Bankruptcy for six years.
- When completing a Chapter 13 Bankruptcy you cannot get a Chapter 13 Bankruptcy for two years.
This may cause issues in the future. For example, if you declare Chapter 7 Bankruptcy and fall on hard times, you cannot file again until the time limits have expired.
Not all debts can be discharged in bankruptcy, such as:
- Recent tax debts.
- Student Loans.
- Child Support.
Source: Nolo. What Is the Downside of Filing for Bankruptcy? 4 Sept. 2014, www.thebankruptcysite.org/resources/bankruptcy/filing-bankruptcy/what-is-the-downside-in-filing-for-bankruptcy.
Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale
Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business Bankruptcy, Chapter 7 Bankruptcy, Creditor Representation, Chapter 5 Claims, Chapter 13 Bankruptcy, Business Restructuring, Chapter 11 Bankruptcy, and more.
*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.