As you become more familiar with the benefits of bankruptcy, such as the ability to save your home from foreclosure and stop wage garnishment, you may realize that it’s just what you’ve been looking for.
But before you move forward, you also realize that bankruptcy will have a negative impact on your financial future.
There is no denying the fact that a bankruptcy is not something you want on your credit report. Unfortunately, a Chapter 7 bankruptcy filing will remain on your report for 10 years, with a Chapter 13 filing doing so for seven years.
Even though bankruptcy will impact your financial future, it doesn’t have to ruin it for good. Here are some things to keep in mind:
- Your credit is already damaged: If you’re considering bankruptcy, there’s a good chance that your credit is already damaged and your score is extremely low. So, even if you do file for bankruptcy, it can only do so much to your current credit standing.
- There are ways to rebuild your credit after bankruptcy: Yes, it takes time, but there are steps you can take toward a better future. For example, you can use a secured credit card to slowly regain your footing and boost your score.
- You’re starting fresh: This is particularly true with Chapter 7 bankruptcy, as you’re able to discharge most or all of your debts. Furthermore, you don’t have to repay any of your debts through a repayment plan. This allows you to keep all your post-bankruptcy income. This provides the opportunity to build the life you always wanted.
- It will pass: The thought of bankruptcy is difficult to lie with, but it will pass soon enough. If you understand the process, your legal rights and what you want to accomplish, you can slowly inch toward a better future.
There’s no denying the fact that bankruptcy will affect your finances, but that doesn’t mean this will always hold for the rest of your life. You have the opportunity to make the most of your financial future.
So, don’t look down on bankruptcy because you’re scared. Learn more about the pros and cons and then make an informed decision.