After declaring bankruptcy, it is natural to feel wary of your family’s future. Unfortunately, bankruptcy often does affect not only the debtor who filed but also the family. Learn more about some of the most common concerns about the effects of bankruptcy on family members.
Will Filing Bankruptcy Affect Your Family’s Belongings?
Whether or not you lose possessions such as vehicles and homes will depend on the chapter of bankruptcy you file. In addition, the court will take the amount of debt you owe into consideration. Under a Chapter 7 filing, you may lose your vehicle or home if there is money that is still owed to the lender. You may also lose these possessions if the court appointed trustee has to sell the possessions in order to settle any debt that is outstanding. However, if you file Chapter 13, you may be able to retain possession if your payments are up to date.
Will Bankruptcy Affect Your Future Finances?
Families also wonder if the effects of bankruptcy will affect their finances in the future. You should take some time to evaluate your family’s budget. And, you should determine which expenses are dependent on credit. You should redirect these expenses or even eliminate them if possible. While it is not impossible for credit companies to approve a person for credit after filing for bankruptcy, you should only apply for credit that you know you can pay off within a month. For example, you may want to use credit for essential purchases such as groceries and household goods and use cash or your debit card for purchases that are optional.
Will Bankruptcy Affect Your Credit?
Bankruptcy typically stays on a person’s credit report for at least seven years. Furthermore, it can remain there for as long as ten years. Courts cannot remove bankruptcy before the seven-year mark. Although you may get approved for smaller loans, getting approved for a larger loan needed to purchase a home or a vehicle may be challenging.
It is important that you schedule a consultation with an experienced bankruptcy attorney so you can learn more about the possible effects of bankruptcy on your financial situation. The attorney will guide you through the legal process so you can make an informed decision.
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