HOW MUCH? - bankruptcy

Life after bankruptcy

   
 

You might be wondering what happens after you file bankruptcy to help you clear your debts. There are serious ramifications to filing bankruptcy as a means to reduce your debt. Let's take a look at some of the common problems that you're liable to encounter.

Buying a Home After Bankruptcy

Chances are if you've filed for bankruptcy in the last twenty-four months you will find it nearly impossible to find a mortgage company that will allow you to take out a loan. If you do, chances are these loans will have incredibly high interest rates and exorbitant monthly payments.

In today's market with more and more lenders having problems with defaulted loans, you'll find it even more difficult than it might have been even a few years ago. If you're considering purchasing a home in the next twenty four to sixty months you'll want to seriously consider other options for managing your debt instead of bankruptcy.

Bankruptcy and Your Credit Score

Once you have filed bankruptcy it is critical that you understand that Chapter 7 bankruptcy will remain on your credit report for a minimum of ten (10) years. Other forms of bankruptcy are highly unlikely to be removed from your credit report ever. While it is true that bankruptcy filings offer you a "clean slate" to some degree, you really are going to have to work on rebuilding your credit file.

Some ways for you to improve your credit score include:

  • Making any and all payments to creditors on time - you may need to consider a secured credit card or a gas card (they normally require paying your balance in full monthly) and making sure they report to the major credit reporting agencies monthly.
  • Don't apply for every card that is offered to you - while this might sound like it's common sense, too often when you've been in the position of not being able to get any credit it might be tempting to build up your credit by taking on additional credit cards. This is a trap - the fewer the cards with a solid repayment history the better for you.

Bankruptcy
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What About Employment After Bankruptcy?

You may not be aware of this but if you're currently employed, your employer cannot take any adverse actions after you've filed for bankruptcy. This includes - denying you promotions, raises or other "benefits" that you would normally be entitled to. This however is very different if you are searching for a new job. While state, county and government employers cannot discriminate against you because of filing a bankruptcy, private employers can refuse to hire you. Most employment applications today include a disclosure of financial information. Learn more about Employment and Bankruptcy.

If it is at all possible for you to avoid filing for bankruptcy to get out from under your debt you should definitely consider other options such as credit card debt consolidation. Bankruptcy filings should be done only as a last resort and not to avoid paying debts. In the long run, this option can be very costly.

Related topics: Bankruptcy Introduction, Types of Bankruptcy, New Bankruptcy Laws, What Bankruptcy Cannot Do

 

 

 

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