March 18, 2018
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The Impact of Bankruptcy

Bankruptcy leaves a lasting mark on your credit and it’s not pretty.  Filing for bankruptcy should always be a last resort after exhausting other possibilities and should only be decided upon after well-informed considerations.


Bankruptcy is not an easy way to get rid of debt, as some believe.  The process is extremely draining and will landlock your credit. The impact of bankruptcy lasts for years, in many cases up to a decade - that’s 10 years of not so hot credit…

Obtaining a loan during this time will be extremely difficult, if not impossible.  Although unlikely, If you happen to find a lender who will work with you, the interest rate will presumably be sky high.  Don’t be surprised if something as simple as a store credit card application declines. Bankruptcy is a red flag that definitely steers lenders away.  

Many employers run credit reports as part of the screening process, and bankruptcy doesn’t fare well here either.

If you decide to file:

Bankruptcy is an option, however, and can be a solution for those who qualify.  Before you file for bankruptcy, get in touch with a reputable credit counselor.  Non-profit credit counseling organizations are an excellent resource. These credit counselors will discuss your current situation and the options available to you. Their objective advice allows you to see your situation apart from emotional stress and pressures.  If bankruptcy is the best option for your case, they will advise you on how to file and the process to expect.

Although lengthy, after your bankruptcy process you will be able to make a fresh start.  Use this time of economic set back to cultivate a financial lifestyle that will prepare you to sustain healthy spending habits.  Consumer credit counselors can assist you in creating and keeping a workable budget and help you develop a savings plan.

We all know that simply cutting back branches will not stop the bad fruit from a bad tree.  Do some internal digging. Determine why you’re driven to overspend, procrastinate or make other poor financial choices.  Then, you’ll be able to uproot the real issue and stop the problem at the source.




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