If you happen to be in a situation when you are forced to think about filling for bankraptcy this information can be useful for you. Statistics shows that every year lots of U.S. citizens file for bankraptcy protection. For more details and statistics you can visit https://www.uscourts.gov/. You can download all the necessary information and complete the leve of bankruptcy from state to state. And it’s essential to know about potential negative outcomes of filling for bankraptcy.
Identifying the nature of bankraptcy: the key moments that you need to know
- It’s legal process to which people who want to get rid of their debts can opt for;
- If you make up your mind to file for bankraptcy there can be 2 alternatives: Chapters 7 or 13.
- What are the basic differences between these 2 chapters and which one to choose? Chapter 7 bankraptcy presupposes the selling off your main assets. They can include personal property (for example, jewlery, clothing, car, furniture and alike), real property (house or land) and intangeble property (for example, money in bank account). Chapter 13 bankraptcy allows to save your assets, but at the same time you’ll be given a certain period of time within which you’ll have to pay off all your debts.
- Bankruptcy is an unfavourable phenomenon for one’s credit score. That’s why filling for bankraptcy should be the last idea which comes into one’s mind. Opt for it if there are no alternatives.
Having a look at the problem: are there possible alternatives to filling for bankraptcy?
Of course, the best idea is to negotiate with debtors and make a plan or a scheme of your payments. This is one of the first steps to be made.
If it’s impossible to find coomon grounds with your creditors, of course, one can file for bankraptcy. We’ve prepared for you seven potential negative outcomes of filing for bankruptcy which are to be taken into account.
Top 5 most unwanted outcoms of filing for bankruptcy
- Filing for Bankruptcy won’t eliminate all your debts
Yes, that’s true. And probably it’s one of the most unpleasant things in the process. You hope that you’ll get rid of all of them, but in reality not all debts can be absolved. In accordance with 523(a) of the US Bankruptcy Code it is stated that there are 19 debt types which cannot be eliminated.
To these types belong federal student loans, back taxes, alimony, governmental penalties, and retirement account debt.
- Bankruptcy leaves an indelible stamp on your credit score
Fair Issac Corporation states that opting for bankruptcy will make you to lose up to 100 points and more in your credit score. By the way, bankruptcy cannot disappear all of a sudden. It can be reflected in one’s credit report for years (even ten) iis pite of the fact that a person has filed for it.
- Financial failure is a public knowledge
As bankruptcy is out in the open, everyone can find information about it. It can become a real problem while searching for a job. While checking your personal information these details can be revealed. Of course, there’s no such a law which prohibits employing a person who has filed for bankruptcy. But at the same time while considering candidature a person who filed for bankruptcy and a candidature of a person who hasn’t – the choice can be made not in favour of the first person.
- Prepare $300 for the process of filing for bankruptcy
Yes, a person who hasn’t got means to pay off debts will have to pay $300 to file his or her case. To be precise, chapter 13 babkruptcy will cost $310 and chapter 7babkruptcy- $335. And if a person makes a decision to opt for attorney service the total prise will be higher. As in many cases attorney’s fees will cost a pretty penny – at least $4000.
- Getting mortage after bankruptcy can become a real challenge
Buying or refinancing a home can become a real nightmare for those who filid for bankruptcy in the past. From our point of view, it’s one of the most unpleasant effects connected with bankruptcy that can happen. As a rule, the terms of buying a house can be stricter in comparison with those who so to say are ‘clear’. The law states that those who filed for babkruptcy on Chapter 7 can apply for mortage no sooner as 12 months. By the way, during the period of time they’ve impoved their finanncial situation. And there’s one more essential parameter to comply with – they must prove that filing for bankruptcy was a least -evel solution. Chapter 13 bankruptcy has even wores and tougher consequences.contents ↑
Bankruptcy: answers to the questions you might have wanted to know
Is it possible to lose a car or a house in case of filing for bankruptcy?
No, you cannot lose it automatically.
Are there any benefits in filing for bankruptcy?
Of course, there are.To help you to make a final decision we’ve prepared a table which summurizes all the negative and positive sides of filing for bankruptcy.
|+the possibility to get rid of your debts which indicates a new financial start;+ no creditor harassment;+ you can rebuild your credit.
|not debts will be eliminated;it affects your credit score;public awareness;the procedure itself is quite expenssive
As you can see there are positive moments, but we highly recommend you to consult a specialist who’ll tell you more about the consequenses and if it is a necessity in your case.
In what cases I can be denied bankruptcy?
Yes, there’s such possibility if:
- there’s a proven charge of fraud;
- there are proven misrepresentation or perjury.
What documents should be prepared to file for bankruptcy?
- Creditor reports;
- Your proof of income;
- Tax returns;
- List of creditors;
- Bank statements.
For more details it is advisable to ask for financial consultation.