It’s a big decision to file for bankruptcy, but sometimes necessary
in order to rebuild your financial life. Along with a new beginning, bankruptcy
brings challenges, leaving you to wonder what life will be like once you
start over. Here, we’ll give you a brief overview of what you can
expect when you begin anew.
Living on a Budget
Depending on the type of bankruptcy you file, you may be living on a tight
budget for some time. Chapter 13 bankruptcy mandates that you make payments
on your debts for three to five years. The court allocates enough money
for you to live on, and the rest of your income goes towards paying your
creditors monthly. You cannot acquire new debt while paying on Chapter
13 debt without permission from the court.
Credit Report Repair
A bankruptcy stays on your credit report for up to ten years, and this
could limit your credit options. Some lenders may consider extending credit,
but usually at a higher interest rate. Many who file for Chapter 7 bankruptcy,
where debts are completely discharged, obtain a secure credit card in
order to rebuild credit.
It’s possible that you’ll see an increase in your insurance
premiums after you’ve filed for bankruptcy, and current or prospective
employers may find out about your situation because bankruptcy is a public
record. A 100-word statement can be added to your credit report explaining
your reason for filing for bankruptcy.
We understand that filing for bankruptcy is a big decision and one that
is not made without considering both the good and the bad that comes along
with it. Discuss your situation with an experienced
bankruptcy lawyer who can address your questions and concerns.
Contact us today to set up a consultation.