Financial Future: How does filing bankruptcy affect future finances?

Depending on your situation, filing bankruptcy can either have a negative or a positive effect on future finances. Filing bankruptcy will no doubt show up on your credit report. This will cause many lenders to not lend money for a home, car, or to get a personal loan. Many creditors will ask if you have ever filed bankruptcy in the past. The answer to this question could mean the difference between getting a loan in the future or not. Of course, not all lenders will turn you down if you’ve had a bankruptcy in the past. It will depend on other things like how much money you put down and what the need is.

Negative

Business owners may be negatively affected by a bankruptcy because it can cause lenders not to give you a loan for business needs. This means if you are trying to start a business or restart one or get money for a business need, it may be difficult to get a loan from a lender with a bankruptcy on your credit report. However if you fail to file for bankruptcy, your future financial situation could be much worse.

Positive

Bankruptcy allows you to get your financial house in order if you are surrounded by debt and have no way to pay your debts. Instead of staying in the same situation and having your debts continue to mount. Bankruptcy will help you straighten your finances out and provide a new start. Bankruptcies don’t last forever. They don’t show up on your credit report forever. They drop off just like any other negative mark on your credit report. A chapter 7 bankruptcy will last for seven years on your credit report and a chapter 13 will last for 13 years on your credit report. Which one you choose depends on your individual situation.

Things to Consider

Many people think it’s the worse option available and try to do everything to avoid it. However, bankruptcy can actually be the best thing to do. It can be a lifesaver. And it can help turn your dire financial situation around. Bankruptcy acts as a shield between you and your debts.

For many people, it allows them a chance to start over again with their finances and gets things organized. You credit score will definitely be affected by a bankruptcy. It will lower it but it may not lower it as much as having a pile of unpaid or bad debt on your credit.

The Truth about Bankruptcy

Bankruptcy can be a bad thing to many people. Most people feel as if they have failed if they file bankruptcy. But bankruptcy does not mean you are a failure. Things happen unexpectedly that we are not able to control, such as job loss, income decreasing, health issues, and other personal issues that interrupt our normal lives and can cause serious consequences.

Good Bankruptcy Attorneys can help greatly in the process of filing for bankruptcy. Experienced attorneys can recommend a credit counseling or debt consolidation that’s better than filing bankruptcy or help you file a claim.

About the AuthorAshley Parker has written hundreds of articles on a variety of topics for more than seven years. Topics that she writes on include alternative energy, healthy living, home design, career advancement, travel, SEO marketing and website content.