Three Bad Things About Bankruptcy
Bankruptcy may seem like an attractive option for relieving your debt problem, but there are many negative aspects to bankruptcy that are rarely considered when debating whether to file. Bankruptcy is generally portrayed as a simple act of signing paperwork and watching your debts vanish while your credit score decreases for a couple of years. Unfortunately, there are many other negative aspects to bankruptcy that you will experience when you decide to file.
Bankruptcy Remains In Your Credit History For At Least Seven Years
Although the process of filing for bankruptcy can be completed in a matter of months, the consequences of filing for bankruptcy can follow you for years. A bankruptcy filing will remain in your credit history for a period of 7 to 10 years, allowing any creditor that pulls your credit report to see that you have filed for bankruptcy and evaluate the risk of extending credit to you. Many creditors will not extend credit to an individual with a bankruptcy in their credit history.
Bankruptcy Filings Are Public Record
Filing for bankruptcy is a legal matter handled through the local court system of the area where you live, so after the bankruptcy is filed; it becomes a matter of public record. This means that anyone searching for information about you will be able to see that you have filed for bankruptcy at some point in your life. The information included in the public record will include your personally identifying information and the businesses involved in the bankruptcy filing.
Some Debts Are Not Discharged
While a bankruptcy filing can get rid of many of your debts, it will not erase all of the debts you owe. Student loan debt cannot be discharged under a bankruptcy filing and unpaid income tax bills that are less than three years old will still need to be paid to Uncle Sam. Medical bills, credit card debts, and most other unsecured debts can be discharged with a bankruptcy, but if you have these other types of debt, you may still have to pay plenty after you have filed.
One Good Thing About Bankruptcy
When other people go bankrupt, you can sometimes but some of their assets at great deals. This is also true for businesses. For example, many businesses have gotten great deals at Drilling Equipment Auctions and other business auctions.
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