How Filing for Bankruptcy will Affect your Family Finances

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How Filing for Bankruptcy will Affect your Family Finances

When bill collectors are harassing day and night and the mountain of debt seems to be growing larger rather than shrinking; bankruptcy seems to be the best way out. Filing a Chapter 7 Bankruptcy will stay on your credit for 7-10 years, but it doesn't always affect you negatively. There are many positive financial aspects to asking the court to clear your debts.

You Can Get Credit Right Away

If you lost in repossession or allowed it to go back during a bankruptcy, you shouldn't worry too much. Before you even receive your discharge, you will be inundated with offers to get you into a brand new car. Once you have a clean slate, you can start rebuilding your credit again. While you will pay a higher interest rate and need to have money down; having a great car is not unrealistic.

Another thing to consider is credit cards. There are numerous credit card companies that work with people just like you. They want those who need to reestablish their credit and are willing to pay higher yearly fees and interest rates to do so. These companies are taking a major risk on someone who is just coming out of bankruptcy, but they charge higher fees to cover themselves.

Your Credit Score Will Go Up

Initially, your credit score is going to plummet when you file for bankruptcy. All of the debts on your report are going to report as being closed or liquidated in the court's proceedings. However, don't let that public record drag you down. Did you know that most home lenders will allow you to purchase a new home within 2-3 years after bankruptcy? That's right, you don't have to wait too long to get back to a good place with your credit. Most people will see their scores go back into the 600-700 range within a couple years. As long as you find something that can help you rebuild your credit, it will slowly go up to a great range.

Getting Legal Advice

If you're wondering how filing for bankruptcy will affect your overall financial future, there will be both good and bad times. Meeting with an attorney like someone from Law Office of K. Hunter Goff can talk to you about both a chapter 7 and a chapter 13 bankruptcy and find out if you qualify. You need to have a no disposable income left after you financial obligations are paid, and the “Means Test” can help decide which type of bankruptcy is best for you.

If you're tired of being harassed by creditors, if you are threatened by garnishments and worried about how to make it through another month; call a legal professional to get your finances back on track.

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