While there are many benefits to declaring bankruptcy, bankruptcy should always be considered a last resort. Those considering bankruptcy should keep in mind the
disadvantages of filing for bankruptcy.
PROS AND CONS OF FILING FOR BANKRUPTCY
Part 2: Cons of Filing for Bankruptcy
Part 2 The Cons of Filing for Bankruptcy
After you file for bankruptcy, you will lose all credit cards if they are not paid off
before you file. In many cases, you can apply for new credit cards within 24
months, but you will probably have to pay high interest rates and annual fees.
You Lose All Credit Cards
The damage a bankruptcy has on your credit depends on how bad your credit was
before you filed. Those with good credit will see a bigger drop than those whose
credit is already poor. Bankruptcy will stay on your credit report for 10 years.
Your Credit is Damaged
Certain debts, like student loans, back child support payments, some tax debts,
and government fines and penalties may not be eligible to be eliminated in a
bankruptcy. Debts incurred through fraud or debts from court judgements in
wrongful death or injury lawsuits are also not dischargeable.
Not All Debts Can Be Discharged
Depending on the type of mortgage you are looking for and the type of
bankruptcy you filed for, you may have to wait to one to four years after the
bankruptcy is discharged to obtain a mortgage loan.
No New Home Mortgage
Court documents relating to bankruptcy are public record and can be viewed by
anyone in the federal governments electronic records. It is also possible that your
name could appear in a local newspaper if the paper reports on public notices.
Bankruptcy is Public Record
"Pros and Cons of filing For Bankruptcy." The Law Office of Areya Holder. Holder Law, 10 September 2010. Web. 1 July
TO LEARN MORE