Going through bankruptcy alone can be an incredibly difficult process but working with an attorney or advocate can help ensure your bankruptcy goes as smoothly as possible. With the assistance of a knowledgeable attorney or advocate, we can make sure your bankruptcy complies with all applicable rules and regulations set in place by the government.

To qualify for bankruptcy, you will need to demonstrate the need to file for bankruptcy. To do this, you will need to prove that you cannot repay your debts and complete credit counseling with an approved credit counselor from the government.

Perhaps the most well-known consequence of bankruptcy is the loss of property. As previously noted, both types of bankruptcy proceedings can require you to give up possessions for sale in order to repay creditors. Under certain circumstances, bankruptcy can mean losing real estate, vehicles, jewelry, antique furnishings, and other types of possessions.

Your bankruptcy can also affect others financially. For example, if your parents co-signed an auto loan for you, they could still be held responsible for at least some of that debt if you file for bankruptcy.

Finally, bankruptcy damages your credit. Bankruptcies are considered negative information on your credit report and can affect how future lenders view you. Seeing a bankruptcy on your credit file may prompt creditors to decline extending you credit or to offer you higher interest rates and less favorable terms if they do decide to give you credit.

Depending on the type of bankruptcy you file, the negative information can appear on your credit report for up to a decade. Discharged accounts will have their status updated to reflect that they’ve been discharged, and this information will also appear on your credit report. Negative information on a credit report is a factor that can harm your credit score.

Just as with unsecured credit, your ability to obtain secured credit can be hindered greatly as well. Credit like this would be if you are trying to get a mortgage for your home. You may be subject to higher interest rates and fees as well as higher down payment and closing fees. Instead of giving up your home, it may be better to reaffirm your current mortgage during the bankruptcy. Doing this would allow you to keep your home while you continue to pay your mortgage.

Your credit is always negatively impacted when you fail to repay your debts. There are always differing consequences depending on each person’s situation. These consequences can be very damaging and last longer on a case-by-case basis. Remember, before you file for bankruptcy, do your research into other methods to debt repayment before filing for bankruptcy. Regardless of what you choose to do and what debt relief that you get, you are responsible for your financial decisions and your future. You can begin taking better care of your credit and your financial standing immediately by putting these simple, responsible credit-positive actions into practice:

• Paying all your bills on time.
• Avoiding taking on additional debt.
• Monitoring your credit report.
• Creating and sticking to a personal budget
• Using credit in small ways (such as a secured credit card) and paying the balances in full, right away.