Bankruptcy is a serious decision, and we don’t want that you get surprises or face any problems after bankruptcy. Before you take this step you need to know some things, this article will help you and explain some consequence of personal bankruptcy.
Bankruptcy is a court proceeding, when you decide to file for bankruptcy a bankruptcy lawyer will help you from start to end (filing to judgment). A bankruptcy lawyer will tell a judge that you can’t pay your debt. The judge and court trustee examine your assists and liabilities to ensure that you really have no resources to pay your debt. If you successfully win the case than Bankruptcy can save your valuable assets like vehicles, jewelry, antique furnishings home and other property. Bankruptcy cancels many-not all-of your debt.
The most well-known consequences are discus given below and it have both positive and negative consequences. Whether you are considering a chapter 7 or a chapter 13, you have to consult with an experienced bankruptcy lawyer to ensure that the process runs smoothly and advantageously.
Credit Score
The most well-known negative consequence of filing for bankruptcy is that it has negative impact on your credit score in both types of personal bankruptcy. How much your credit score will be affected is depend on multiple factors so it is difficult to make an estimate before final hearing of this procedure. If you have high credit score before filing and after filing bankruptcy it will be automatically decrease. And when your credit score is low than it will make much more difficult to get credit in future. If you get credit, it will result in higher interest rates that means you will pay more money for loan.
Privacy Eliminate
A negative consequence of filing for bankruptcy is that everything you file with the court and it eliminate personal privacy. When you file for bankruptcy you have attached all previous record like bankruptcy schedules, personal financial information, and it can be accessed by the public. Some time you can use only the last digits of your social security number and taxpayer identification number, and you may list minors by their initials.
Loss of Property
Loss of property is very dangerous consequence in whole bankruptcy procedure. As previous I noted that bankruptcy can save your valuable assets. It will only be possible when you are able to successfully exempt your property. And if you are unable to exempt than the trustees will sell it to repay creditors. Under certain circumstances bankruptcy can mean losing real estate and car.
Personal Discharge
On a positive note, at the end of bankruptcy proceeding mostly result in discharge. It means that judge relies that your financial situation is not so good and not be able to pay debt. So he order the creditors to stop collecting debts. Some time it is not applicable on debt that is secured with real estate property.
Stay on Debt Collection
Another positive aspect of filing for bankruptcy is the automatic stay, which means that when you file for bankruptcy and start proceeding than automatically creditor cannot be able to collect debts during bankruptcy proceedings. It will remains effect until the bankruptcy court issue a discharge.
This article is for informational purpose only and not for the purpose of providing legal advice. You should contact your bankruptcy lawyer to take free legal advice to discuss about your situation.
Helping Guide for Bankruptcy Petition 