This topic is complex and difficult to answer concisely since many different aspects of your life can be impacted by filing for bankruptcy. Here are three ways bankruptcy affects your life.
Sometimes people feel guilty or ashamed that they have gone bankrupt, particularly since society has developed a negative stigma around bankruptcy. However, like any decision in life, there are pros and cons, but in the long run, the benefits of bankruptcy almost always outweigh the costs. In financial terms, as soon as you file for bankruptcy, creditors and collection agencies can no longer hassle you, and your income can no longer be garnished. A fresh financial start can be a great relief.
Your Credit Score
Your credit score can actually go up by filing bankruptcy. With Chapter 13 (reorganization), your bankruptcy case will appear on your credit reports for seven years from the filing date (not the discharge date). With Chapter 7 bankruptcy (liquidation), the record will be kept for ten years from the filing date … At first, you will probably find it difficult to get any type of credit. However, the situation will get easier as time goes by, especially if you work to improve your credit score. Remember there is Life After Bankruptcy.
Your Future Employment
Keep in mind that when it comes to seeking new employment, there is no law prohibiting potential employers from checking your credit report and finding your bankruptcy. However, it is illegal for them to refuse to hire you only on the grounds that you filed for bankruptcy. The same is true of current employers: they cannot fire you because of your bankruptcy. You can learn more about this “Protection against discriminatory treatment” at the following website.
Housing
Finally filing bankruptcy can have a negatively affect your ability to obtain a mortgage to purchase a house in the short term. It may also affect your ability to rent an apartment, until you have rebuilt your credit rating. Securing a lease before you file for bankruptcy can help ensure you have a safe place to live, provided your credit rating has not already gotten so bad that landlords will turn you down even without the bankruptcy. Small private landlords may not run a credit check, or may not turn down renters for a bankruptcy as long as you have deposit money and employment to cover the rent each month.
These are just three examples of how bankruptcy affects your life. Keep in mind that although there are some drawbacks to bankruptcy, they are only short-term and can’t overshadow the fresh start that you’ll obtain by filing. Work with a Utah experienced bankruptcy lawyer to help you rebuild and restore your lifer after bankruptcy.