Bankruptcy consequences
Here we present an outline of the main consequences of bankruptcy to show how becoming insolvent can affect every area of your life. By having all the information on the consequences of bankruptcy, making an informed decision will be a lot easier.
Credit history
Filing for bankruptcy can stay on your credit report for up to 10 years (seven for Chapter 13). However, this kind of black mark on your credit history does not necessarily disqualify you from gaining credit; especially credit cards. In fact the shrewd credit card industry is only too happy to take advantage of your bankruptcy status knowing that filing for Chapter 7 protection means you have no debt. More...
.In addition to this, credit card companies also know you can’t file for bankruptcy for six years – making you an ideal candidate for credit.
Acquiring a mortgage or a car loan, on the other hand, may be much more difficult; but if you’re in a position in which you are considering bankruptcy, a home mortgage may be seven to 10 years away. Finally, probably the most common difficulty after filing for bankruptcy is finding a landlord who will approve your application; in those cases, co-signers, advanced payments, and roommates may be necessary.
Don’t miss our tips on how to rebuild your credit in our credit report section.
Business
If you are a business owner, you can expect your business to be shut down and your employees dismissed. Legal restriction will also dictate that anyone you do business with must be informed of the name in which you have been declared bankrupt.
Career
If you apply for a government job (federal, state, or local), you cannot be denied employment for having had filed for bankruptcy. There are no such prohibitions on private employers however, meaning if a private employer runs a credit or background check and learns that you have filed for bankruptcy, the employer may find that to be indicative of your character and refuse to hire you. In truth, however, this is probably very rare, both for your prospective employee to find out about it and for that same employer to deny you a job based on a bankruptcy.
However, if you are in a position of trust – such as a budgetary role within an organization – you may lose your job.
Personal
Last but not least, how it affects your personal life. The strain of being in debt is the most common reason for marriage break-ups, so there is every chance this financial crisis may cause one in your home. Relationships may be altered depending on who was the breadwinner. Sacrifices and the inevitable drop in living standards may also breed disharmony and resentment within a relationship. These are more than just ripple effects of the bankruptcy; implications of bankruptcy made on the family can be even more serious than those previously mentioned. Try being proactive and see if you arerisking bankruptcy. Visit bankruptcy alternatives to find out how.
Make yourself at home in our Forum and find out what everyone else thinks about bankruptcy in America. There is also our up-to-date News section for all the latest on personal finance. If you need help finding a provider or would like to review a company, please don’t go without checking out our A-Z directory.
