A Few Quick Words Of Wisdom Before Filing For Bankruptcy

Bankruptcy has become a kind of “quick fix” for debt that has gotten out of hand. However, they are sadly mistaken in thinking that this could help get them out of debt and free them up to start anew. However, there are several things you must know about this option, one of which would be that it would ideally be your last line of defense.

The actual procedure for filing – the paperwork process itself – is relatively simple, but it goes beyond that. You’ll need to be able to justify the reason for bankruptcy, which will open your financial history for inspection by the courts. This also means opening up your records to objections from creditors, who would beg, borrow and steal practically to prevent you from filing.

There are also some effects of bankruptcy that may manifest themselves in the long run. Any credit cards that have balances that are wiped out by the bankruptcy will obviously be cancelled, but any other credit card accounts you have will likely be closed as well.

And if you attempt to apply for an auto loan or mortgage, chances are it would be rejected. If you are approved, it will likely be at interest rates that are much higher than the norm.

Bankruptcy does not exonerate you of each and every one of your debts. There are some forms of loans that are exempt from bankruptcy ruling, such as student loans, tax bills outstanding (at least those within the last three years) and other assorted loans that would still need to be paid for.

A bankruptcy will remain on your financial record for 10 years, during which time you will find it difficult to qualify for any kind of financing, even if you keep a perfect credit record during that time.

A bankruptcy is generally viewed as a particularly bad mark on your credit score – more so than a low FICO score, late payments or other problems.

But there would be some times when filing a bankruptcy would be the best way out. It will protect you from the relentless badgering of collections representatives (just as long as you notify them of the filing), can preempt foreclosure action and prevents your salary from being garnished with the “relish” of deductions.

But there is still one more “secret” benefit to filing for bankruptcy, if credit card debt is at the forefront of your filing. Since your chances of qualifying for a credit card after bankruptcy are slim to nil, you will be spared from the temptation to make frivolous purchases on your credit cards, because you probably wouldn’t qualify anyway.

It could be a huge black mark on your record if you declare bankruptcy, but if it is the last available option, do not hesitate to do so. Look on the bright side, because at the very least, you have this opportunity to start fresh and not have to deal with debts that are way over your head.

No matter what type of injury you’ve suffered, start your claim with a leading national personal injury claim service.

No related posts.