One of the most misunderstood aspects of bankruptcy—and one of the biggest reasons why some people in debt do not file for bankruptcy protection—is what to expect in life after bankruptcy. How will your credit be affected? Will you be able to get a car loan, a mortgage or even a regular credit card?
Understanding life after bankruptcy is important and can help you figure out if bankruptcy is the best option for your financial situation. Cutting past the myths and rumors about bankruptcy requires honest and knowledgeable information from an experienced bankruptcy attorney. At my firm, I will provide the answers you need about the bankruptcy process.
For all of the benefits that bankruptcy can provide, it is often worth it for many consumers and small businesses to file for Chapter 7 bankruptcy, despite the impact that it may have on their credit reports and their lives after bankruptcy.
Rebuilding Credit After a Bankruptcy
One of the questions that most people have when considering bankruptcy is: how will bankruptcy affect my credit?
There will be an initial impact on your credit report. A bankruptcy will be on your record for 10 years after you file and this can be seen by any potential employer, bank or credit agency. This is not as damaging as it seems, however, as there are other factors to consider.
For one, while the bankruptcy will be on your credit report, your eligible unsecured debt will be discharged, thereby improving your debt-to-income ratio. Secondly, you cannot file for bankruptcy again for 8 years, so credit companies know that you cannot discharge their debts for a lengthy period of time.
In many cases, people who have filed for bankruptcy are able to get lines of credit again in a relatively short period of time. Clients of mine have received unsolicited credit card offers within 6 months of filing. You can usually get a car within a year and a mortgage within 2 to 3 years.
In order to avoid similar problems in the future, however, it is always wise to create a budget plan for your credit cards and other spending. At my firm, I can help you analyze your finances and create a plan that works.
Learn More About Life After Bankruptcy
At your free initial consultation, we will look at your financial problems together, so that you can understand what bankruptcy can do for you and what you can expect when the process is finished.
