I currently have a friend and her husband who are trying to buy a house. After years of renting, they want to own one of their own. However, it’s been difficult. Bankruptcy stays on your credit report for 7-10 years making getting anything credit related, including a house, very difficult.
Bankruptcy may seem like a good idea during desperate times, but there are some things to consider. First, it will be on your credit report for a long time. Like I said it’s a minimum of 7 years, but could be up t0 10. Second you may be able to get credit during that time period, but you are going to pay higher interest rates which means you pay more for the item. Getting a job could be hard as some employers will ask if you’ve ever declared bankruptcy. They want to know if you are responsible. And lastly, bankruptcy doesn’t get rid of all debt. Secured debt like a car loan or home loan will still have to be paid if you plan on still using them or staying in them.
Depressed yet? Well there are some pros to bankruptcy. First you get to start all over. Maybe the mistakes you made were right out of high school and now you have a better head on your shoulder but no way to dig yourself out. This could be a good start for you. You won’t have any more harassing phone calls from creditors. And lastly you can’t be sued. Bankruptcy protects you from creditors coming after you.
Regardless of your decision, it’s important to be informed and to know the facts. Bankruptcy is very serious. It’s probably the most serious financial decision you can make. It’s definitely a last resort option and shouldn’t be taken lightly.
Any advice for those thinking of declaring bankruptcy?
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