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.