Avoid Bankruptcy

Why You should Avoid Bankruptcy?

You can reconsider your decision of filing bankruptcy as it can affect your long term financial situation. You can get relief from debt but this won’t be beneficial for a long term goal. Filing bankruptcy can damage your credit report for next 10 years and you can lose control over your valuable assets. The most common type of personal bankruptcy filed by the consumers is chapter 7 and 13 bankruptcy.

Here are the following four reasons to avoid filing bankruptcy:

1. Negative effect on your credit report:
Filing bankruptcy can adversely affect your credit report. Once you file under chapter 7 bankruptcy your credit score would plummet by 200-250 points. This negative remark would exist on your credit report for 7 to 10 years. This would create impediment to apply for new loan program for next 3 to 4 years.

2. Lose your ownership:
You might lose your ownership on valuable assets after filing bankruptcy. Under chapter 7 bankruptcy the court appointed trustee would sell your non-exempt property in order to repay the creditors. Until you are eligible to qualify for federal or state exemption you might lose your ownership authority over your house and other priceless property. Therefore it is advisable to avoid bankruptcy.

3. Won’t be eligible for new loan:
Your chances of getting loan would be less after filing bankruptcy. Two to three years would be required to be eligible to qualify the criteria for loan application. Your application for unsecured loan would be rejected on the basis of filing bankruptcy. But you can apply for a secured credit card but the interest rate would be high when compared with the average.

4. Won’t discharge all your debts:


If you think filing bankruptcy can eliminate your entire debt then you are mistaken. There are numerous myth associated with filing bankruptcy. As a filer might think that filing bankruptcy would help to discharge his existing debt but this is not possible in reality. Few debts like a student’s loan, tax lien as well as child support and alimony is not dis-chargeable under bankruptcy filing.

This article has been written by Angela Sanders. She is associated with Oak View Law Group, a trustworthy debt settlement firm.

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