If you’re considering filing for bankruptcy, there’s no doubt you’re considering all of the consequences of filing, including the good and the bad, along with what your life may be like after you’ve filed. Here, we’ll try to shed some light as to what life is like after bankruptcy.
Credit Limitations
Bankruptcy stays on your credit report for up to ten years, and this can somewhat limit your credit options. There may be times when a lender views you as too risky because of the write-off of past debt. After bankruptcy, you may find it difficult to obtain a credit card.
High-Interest Rates
If you’re able to find a lender or bank who will issue a credit card, it’s likely that the interest rates and fees are high. If you file for Chapter 7 bankruptcy, where all your debts are discharged, you may be able to obtain a secure credit card, which can help you rebuild your credit without putting you back into debt.
Tight Budget
If you file for chapter 13 bankruptcy, you may find that money is tight for awhile. Chapter 13 allows you to pay off your debt over time, usually three to five years. The court will allow you to allocate an amount to live on while you pay off your debt, but that amount won’t allow for a lot of “extras”. When you’re on a Chapter 13 repayment plan, you are not allowed to acquire any new debt without first receiving permission from the bankruptcy court.
Insurance and Employment Implications
Bankruptcy can also cause your insurance rates to rise. Also, a current or prospective employer may find out about the bankruptcy because it is a matter of public record.
For more information on life after bankruptcy, contact us.