How can filing for Bankruptcy affect you?

Posted by admin on September 10, 2018
Close up of cut pieces of credit card after filing for bankruptcy

Deciding to file bankruptcy is never an easy choice and it can help to understand how this type of proceeding will affect your future. In truth, there are both advantages and disadvantages to filing for bankruptcy. By taking the time to understand more about how your future will be affected, you’ll be able to make a more informed decision.

The Drawbacks to Filing Bankruptcy

Before enlisting the expertise of a bankruptcy attorney, such as Justin M. Jackson, it’s a good idea to understand that your financial future can be inhibited. While bankruptcies do help you alleviate the stress of mounting debt, there are also disadvantages.

A Poor Credit Rating

While your credit score may already be suffering from poor financial decisions, filing bankruptcy will compound the problem. You’ll suffer from a lower credit score and it will take you some time to recover. Currently, it takes as long as 10 years to rebuild a credit rating, after filing a chapter 7 bankruptcy.

Say Goodbye to Your Credit Cards

You’ll have to forfeit any credit cards you currently possess. Additionally, it will be several years, before you can expect to qualify for new credit cards.

Loss of Property

Except where the property may be exempt from sale, the bankruptcy trustee will liquidate your assets to cover your debts. This is especially true of luxury items, such as artwork, designer clothing, and jewelry.

The Advantages to Filing Bankruptcy

Even after weighing the consequences of a bankruptcy, many people choose to move forward with filing. This is because they realize that a bankruptcy is the best alternative to continuing to drown in debt. Once you start the process, you’ll find that there are several advantages to pursuing this course of action.

An Expedited Process

A bankruptcy attorney, such as Justin M. Jackson, can give you a more precise timeline, but, typically, the entire process takes from three to six months. This will help you feel relief from the pressures of your creditors sooner, so you can begin to move forward.

You May Qualify for a Line of Credit

While you won’t be able to get credit cards for many years, the same may not be true for lines of credit. Some people qualify in as few as one to three years, though you should expect to pay a higher rate of interest.

Exempt Assets

Usually, most of your personal property will be declared, allowing you to keep the majority of your belongings. In addition, you will likely be able to keep your salary and the items you buy, after the completion of the bankruptcy. This will make it easier for you to recover and to build a better financial profile.

If you are considering bankruptcy as a solution to mounting debt, the wisest course of action you can take is to consult with an experienced attorney. Our bankruptcy attorneys at The Jackson Firm in Cedar Park have years of experience. Contact their offices for a consultation to find out what they can do to help you resolve your financial problems.

For more information on our Bankruptcy Attorney in Cedar Park, please visit our site.

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