Bankruptcy can bring financial relief to people drowning in debt, but it’s not exactly the easiest way out˳ If you’re considering of filing for bankruptcy, make sure to consider the consequences it will bring to your life˳
The worst effect of bankruptcy would be on your credit˳ This may not be of real importance to you now — if you’re in a critical financial dilemma and filed under Chapter Seven or other forms of bankruptcy, then your credit score may not be your top priority˳ But remember that after you declare bankruptcy, you’ll have a hard time getting loans˳ What’s worse, you may need to pay higher interest rates for the loans you manage to get, and your credit report will show a record of your bankruptcy for the next 10 years — not very pretty˳
In addition, when you file for bankruptcy, it won’t eliminate all your debts˳ For most people, student loans, taxes, child support obligations, and criminal fines won’t be eliminated˳ If most of your debts are composed of these, then filing for bankruptcy may not be worth it for you˳
You may also lose some of your personal possessions in this situation˳ If you have reached this phase of your financial status, you may only have a few items of value on hand˳ Certain assets that aren’t exempted for the purpose of bankruptcy are required to be surrendered in this case˳ Depending on the worth of your home and homestead exemption, your house might be in danger˳ Just to be sure, discuss this with your lawyer˳
One more important thing to consider is the impact of bankruptcy with your creditors˳ It’s not only big corporations like credit card companies, but also small businesses who extended credit to you are left with nothing once your debts are nullified˳ Of course the security of your family should be your first priority, but do take this into consideration˳
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