The consequences of bankruptcy is one of the things most people worry about when they are considering filing for bankruptcy. Unfortunately, bankruptcy is not the easy financial bailout many think it is. There are several ramifications you may face as a direct result of your bankruptcy discharge. However, are you aware of what the consequences are? One of the most common questions is regarding personal property loss. Most likely, you will not lose your personal property, but you will need to discuss your specific financial situation with an experienced bankruptcy attorney.
One of the first consequences of bankruptcy you should be aware of is the lack of privacy when filing for bankruptcy. Because the court system handles the entire process, it is considered public record. This means that all of your filings, bankruptcy schedules and personal information will be available to anyone searching for it. Some may consider this a deal breaker. Others, however, overlook this fact when knowing they have a possibility of cleaning up their financial mess.
Another consequence you should know about is how filing for bankruptcy will affect your credit. Typically, filing for bankruptcy will cause your credit score to go lower. However, most people who file for bankruptcy do not have the best credit scores anyway. The good news is that you can reestablish your credit and improve your score over time. The bad news is that the bankruptcy will stay on your record for several years.
A discharge is an order given by the court that prevents creditors from ever trying to collect on debt that you incurred before the bankruptcy filing. The only exception to this would be debt that cannot be discharged. A bankruptcy attorney will help you figure out whether your debts can be discharged or not.
The downside to a discharge is that it does not include property. For example, if your home was in the beginning stages of the foreclosure process before you filed for bankruptcy, the lender can choose to proceed with the foreclosure once the discharge has been ordered.
When asking what is the downside of filing for bankruptcy, make the best decision you can for you and your family. Meet with an experienced lawyer before you decide to file.
Do not let the fear of the consequences of bankruptcy keep you in debt. Contact us for a free consultation and learn the facts about bankruptcy and if it is the best option for you.