When you file for bankruptcy, it allows you to get rid of or pay back some of your debts; it should not be taken lightly. There are penalties involved in filing for bankruptcy. It is very essential for you that before you file for bankruptcy, you should be aware of the common disadvantages of bankruptcy. Let us discuss it briefly.
Crash your Credit
One common disadvantage of filing for bankruptcy is that it may crash your credit report. Bankruptcy mayallow you to begin a new financial schedule, but it will ruin your credit report for ten years if you file forChapter 7 bankruptcy. However, bankruptcy may not be so harmful for your credit other than the financial conditions that lead to the bankruptcy filing. Most of the people struggling badly with their debt arenot exactly maintaining a superiorattain to start with. In spite of this, many people see an improvement in their credit scores after filing for bankruptcy. You can even reconstruct your credit after filing for bankruptcy. One of the best ways to perk up your credit score is to work out with a local bank or credit union.
Losing Personal Property
Losing property is another drawback of filing for bankruptcy. In order to clear your debts, when you file for Chapter 13 bankruptcy, you can set up and hold to a debt refundable plan that can clear your debts. In Chapter 13 bankruptcy, you should keep allof your personal property, but do make sure to pay the monthly dues for a period of about three to five years to repayall of your debts. If you file Chapter 7 bankruptcy case, the bankruptcy trustee may take over your property or sell your property so as to repay your debt. However, there are certain property exceptions that allow you to keep certain possessions. So, if your property is leftout then it cannot be usedto sell and pay off your creditors’ urges. Chapter 7 and Chapter 13 bankruptcy have included so many rules regarding what property you can keep and what not. So, a qualified attorney can help you to get your property back.
Effect on Emotions and Lifestyle
Declaring bankruptcy can greatly have an impact on one’s emotions and lifestyle. You may feel beleaguered, ashamed, and confused. For example, when you file Chapter 13 bankruptcy you may have to fixwith court related financial rules and regulation during the entire period of refund.
Filing for bankruptcy can really be stressful and emotional, and it might even create a negative impact on your lifestyle. So, please keep in mind of all the disadvantages while filing a bankruptcy. Be sure to contact an expert and a qualified attorney who can help you in such circumstances. However, when you are thinkingof filing for bankruptcy to reduce your financial debt, you should meet up with a qualified bankruptcy attorney.
For more information on any kind of bankruptcy cases please feel free to contact our expert bankruptcy lawyer at the Law Offices of Scott R. Schneider and visit our site at http://www.scott-schneider.com