Becoming Familiar With The Most Common Misconceptions Of Bankruptcy
Bankruptcy is a common reality that many people have to face. Though it is a difficult process, it may be the only means you have of getting out of debt. Chapter 7 bankruptcy is very common for those who find themselves owning more than their income will allow. Chapter 7 Bankruptcy will allow you liquidate any assets in order to help pay down your debt. It will also help you to be creditor free while trying to build your credit score. Below is a list of common misconceptions about chapter 7 bankruptcy. It will help you to better understand the process and what to expect.
You Won't Be "Debt Free"
The goal of a chapter 7 bankruptcy is to help you eliminate debt that has been built over the course of many years. However, you can only declare bankruptcy on debt that is unsecured. For example, you can file bankruptcy for medical or credit card debt. You can also file bankruptcy papers on taxes that are three years or older. You cannot, however, declare bank on debt that has resulted from student loans, child or spousal support or fines that you may owe to government agencies.
Bankruptcy Is A Matter Of Public Record
You shouldn't be surprised how easy it will be for someone to find out that you filed for bankruptcy. Bankruptcy is a matter of public record, so as soon as you file your paperwork, it will become a legal case so anyone who wants to will be able to access it. This may prevent career and promotion opportunities. Many businesses will look at your credit history in order to see if you are responsible in your private life, as well in as your professional life. Any employer could decide that a bankruptcy means that you have made poor decisions when handling money and decide not to hire you.
If your potential place of employment is asking for a background check, plan on answering questions about your past credit history. Sometimes, all an employer needs is an explanation on the situation in your life that led to poor investments. You should also have a letters of recommendation and references with you. This will show the interviewer that while you have declared bankruptcy, there are other people who find you responsible.
Bankruptcy Remains On A Credit Report
Though bankruptcy will clear most of the delinquent and negative marks on your credit scoring, the bankruptcy itself stay on your credit history. For ten years, any credit agency will be able to see that you filed for bankruptcy and it will hinder you from getting approvals for credit cards or home and vehicle loans. If you are approved for any line of credit, you could be facing an interest of up to ten-percent. Those who file for bankruptcy are considered a high risk of not paying what is owed, so it will be harder for any agency to decide to finance you.
Bankruptcy is a difficult process; however, it is very common for those who cannot afford to pay their debtors. Being aware of the facts listed above will ensure you are not taken by surprise when the process does not go exactly according to your plans. Contact an attorney like Howard S. Goodman Bankruptcy Attorney for more information.
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