The Ugly Side Of Bankruptcy
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If you’re facing large amounts of debt, you’re probably looking for any way to feel debt relief. Declaring bankruptcy might appear to be the best financial decision, but in the longrun it can hurt a lot more than it can help.
Consider these facts before making any financial decisions that you might regret later.
Bankruptcy can ruin your credit
Filing bankruptcy can lower your credit score by as many as 250 points. What’s even worse is that declaring bankruptcy can stay on your credit report for 7 to 10 years, depending on what chapter you file, making it years before you’ll be able to qualify for a loan or new lines of credit.
You can lose your property
Filing bankruptcy can put you at risk to lose many personal items. Even after declaring bankruptcy possesion such as cars and homes can be repossed to fulfill outstanding debts in Chapter 7 bankruptcy.
You can’t eliminate all debt
Declaring bankruptcy can absolve some of your debt, but if you owe back taxes or student loans, bankruptcy won’t help you. Be sure that filing will actually be beneficial to your situation before you go through with it.
Your property can be repossessed
Even if you’ve declared bankruptcy, it could be possible for your creditors and lenders to repossess or foreclose property. In some circumstances they can force you to pay the full debt amount and take back assets such as your property if they have a lien against it.
Your life will be severely disrupted
Filing bankruptcy can do more than just affect your credit report. It could take up to several years before being accepted for an unsecured loan once you declare bankruptcy. Even unsecured loans will be harder to come by. One of the few credit sources avaible to you will be credit cards, but they will have high fees and interest rates.
After filing bankruptcy, even renting an apartment or car will be a challenge, so weigh all of your other options before making such a huge financial decision. Bankruptcy is not the only debt relief option, other programs and services are available. SOme of these options include debt settlement, debt consolidation, credit counseling, and debt management.