Posted on: 20 February 2019
Financial stress is known to be one of the leading causes of relationship problems, as well as a potential contributing factor for depression and substance abuse problems for many Americans today. Filing for protection in bankruptcy court is a legal option available to individuals, couples, and businesses, who find themselves burdened with debts they are unable to pay.
At first glance, bankruptcy protection can seem like the ultimate solution for those who have grown weary of struggling to pay off debt, but there are some important facts about bankruptcy that must also be considered before taking this type of serious legal action.
Bankruptcy invades your personal space
Before moving forward to file bankruptcy, it is important to understand that doing so will become part of the public record. Like most legal proceedings, the details involved in your bankruptcy filing, including the amounts you owe and the names of your creditors, will be part of court documents that will be available to and searchable by the public.
In addition to the potential embarrassment of knowing that nosy friends and neighbors will have access to information you may prefer to keep confidential, it is also possible that future employers and business associates may also see this information. Since all bankruptcy proceedings must include full disclosure at risk of legal penalty, you will be required to provide a complete listing of all your creditors, and debts, as well as real and personal property and any other assets you may own.
Bankruptcy has a lasting effect on your finances
Another important factor to consider before opting to file for bankruptcy protection is the length of time you can expect it to affect your finances. At a minimum, you should expect for bankruptcy to prevent you from receiving most loan offers for a minimum of two years. During this time, it may still be possible to take out a loan, but the interest rate is liable to be much higher.
Since bankruptcy stays on your credit report from 7 to 10 years, depending upon whether you filed for Chapter 7 or 13 protection, it is visible to mortgage lenders and other prospective creditors and employers throughout that time and may affect their decisions to extend home, business, or other types of credit.
Even with these serious drawbacks, filing for bankruptcy can still be the best solution to relieve some types of financial stress. If you would like to learn more about bankruptcy and whether it is a good option for you to consider, make an appointment to discuss your situation with a reputable bankruptcy attorney near you.Share