Bankruptcy Is an Experience – Learn How It Affects You
Like every other thing, bankruptcy also has a lot of repercussions that are divided in good and bad. While there are some benefits to claiming bankruptcy, running away from your impending debts isn’t a good idea especially if you have little idea how doing so will affect your life. The following are some aspects of declaring bankruptcy that you need to know before doing so.
Temporarily Destabilized Credit: A negative mark will appear on your credit report once bankruptcy appears on it, which will stay for about 7 to 10 years. Only with time will the ill-effect of bankruptcy go away and newer actions will begin to take their place in the credit report.
Problems in Getting Loans: It becomes extremely difficult to qualify for a loan even months after proceeding with bankruptcy, since declaring bankruptcy is the same as putting a blank mark on your credit report.
Not everything about bankruptcy is negative, which is fortunate for people considering it. Other than taking debt counseling for bankruptcy that will educate on the matter, people can view this as protection against liabilities that are usually faced when they are struggling to make ends meet and failing. Below are listed the specific positive effects that can happen to people when filing for bankruptcy.
End of Lender Contact: You are entitled to legal protection by lenders and creditors with the help of the ‘automatic stay’ that takes effect immediately after you file for bankruptcy in court. This means that the creditors can no longer intimidate you by threats of repossession, foreclosure or garnishment while the case is going on.
A New Financial Beginning: You may have likely thought long and hard before deciding to declare bankruptcy. Not only is this a major step but fortunately for people, it’s also a rewarding one and a chance to rebuild their finances. People who reach this step have often learnt from their past financial mistakes and so focus on restructuring them to a healthier path.
Improved Credit Than Before: You credit rating is likely to take a hard blow immediately after declaring the bankruptcy but with dedication and some help, you can build a stronger credit score as this is the best chance.
To know more about what to expect after declaring bankruptcy, consider approaching debt counseling for bankruptcy at Empire One as an effective resource to steer through the financial storm.