How Will Bankruptcy Affect My Future?
When considering bankruptcy, most people will want to consider how this decision will affect their future – both in the short term and the long term.
The truth is that bankruptcy has its upsides and its downsides, and those who are considering whether or not to file have a lot to consider. That being said, bankruptcy can ultimately mean getting out from underneath a lot of debt that would otherwise keep piling up.
While we think that counts for a lot, we understand it’s not everything. What follows are some of the ways bankruptcy could affect your future.
Bankruptcy Can Mean Immediate Debt Relief
Once the court discharges your debt, you no longer have to worry about it. It’s gone – just like that! If you’ve been battling against debt for a long time, you might feel relaxed like you haven’t felt for years. Now that your previous debts (or at least a decent chunk of them) are wiped out, you can have the time and freedom to rebuild your financial life.
Debt relief also means that your creditors will stop hounding you for old debts. No more should you have to face relentless phone calls, letters, and emails harassing you about your debt. You also won’t incur any more fines or interest that may have made your debt unpayable in the first place.
Bankruptcy Will Hit Your Credit Score
Bankruptcy doesn’t come without its consequences. One of the first unpleasant effects that you might notice is the impact on your credit score – it will take a hit.
The extent of that impact will vary, but generally, those with better credit scores before bankruptcy will lose the most points. If your score is 700 or greater, expect to lose about 200 points; if your score is a little less than 700, you may lose 130-150 points.
Again, your credit score is comprised of various facts about your financial life, and bankruptcy is just one of these. If you’re concerned about bankruptcy tanking your credit score, though, consider that your score will improve over time if your borrowing habits improve. You might be surprised to see how well it can improve even just a year after completing bankruptcy.
Credit Can Be Harder to Get – But Not Impossible
Bankruptcy stays on your credit report for about 10 years. This means that having a recent bankruptcy discharge on your credit report will make it harder to obtain credit than it would be otherwise, but it’s not impossible to find creditors willing to work with you.
In fact, many lenders have various financial products available that are designed to help people rebuild their credit scores. Beware of scams and promises that seem too good to be true, though! Rebuilding credit takes time and effort, and it doesn’t come easily. Do your research and consider consulting with a professional who can provide legal or financial advice.
Over time, and as your credit score improves, you might find that you’re in a better position to apply for credit and loans that may have seemed inaccessible immediately after your bankruptcy.
Contact Us for Help with Bankruptcy
Bankruptcy can have many impacts on your life, but it’s important to look ahead as far as possible. Because bankruptcy can mean debt relief, a lot of the problems that brought you into a difficult financial position can be addressed and eliminated with bankruptcy.
If you need professional legal guidance when it comes to bankruptcy, you can trust Buchalter & Pelphrey Attorneys At Law for help. Our legal team is experienced in bankruptcy-related matters and can provide the insight and services you require to achieve financial freedom.
For more information about how we can help, contact us online!