The Consequences Of Filing For Bankruptcy

There are times when an individual or a business reaches the point where they can no longer service their debt and they decide to look into filing for bankruptcy. There are cases where filing for bankruptcy in Naperville is the best course but at the same time bankruptcy is something that is to be taken lightly, it should not be seen as simply a way to crawl out from under a mountain of debt. There are serious consequences of filing for bankruptcy, theses consequences must be carefully considered and weighed against the benefits.

Becoming a bankrupt can make obtaining credit in the future very difficult. Unfortunately there is a prevailing opinion that getting credit after declaring Chapter 7 bankruptcy is not all that difficult. Up to a certain point there is a grain of truth to this as there are plenty of high risk credit card providers that will extend a credit line to recent bankrupts but the interest rate is extremely high. It is common to limit access to credit to those who have declared bankruptcy for major purchases for at least two years. For example, if a recent bankrupt tries to qualify for a home loan this is not even going to be considered until at least two years after discharge. If the person declared Chapter 13 all the debts that were associated with the bankruptcy in Naperville must be paid off in full and then a further two years must pass, in this period of time the individual’s credit report must be free of any negative entry’s.

Not only will bankruptcy make obtaining credit hard, in many cases it also has a negative impact on career opportunities in the future. A person who at one time declared bankruptcy is often not eligible to be a director in a business. It may also be difficult if not impossible to hold office in local organizations. What may appear as a simple act can greatly diminish the confidence that customers have in the company or a person.

At the very least bankruptcy is just more bad credit history. The credit score of the bankrupt will be impacted for as long as ten years no matter how the bankrupt turned his or her financial affairs around. The best one might get is credit that is outrageously expensive, the worst case scenario is not getting access to credit to obtain a home or vehicle.

Although there are a number of negatives associated with declaring bankruptcy in Naperville it may be the best solution in the long run. To discuss the issue in detail you are invited to contact Chicago Debt Solutions by the Law Offices of Trepeck Law Group.

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