10 terrifying things they don’t tell you about bankruptcy
Many will definitely encourage you to file for one, without letting you know all the forfeitures you are about to make. It is with this reason that I came up with the list of things that you are entitled to know before making any commitment.
1. You can meet your Debt Obligations
Have you ever compared your debt versus income? Income by far seems to outweigh the debt, in most cases. As such, with a few sacrifices here and there, you can make payments of all your debt with just your income! This is what they don't tell you, but most people in debt do this all the time and they have emerged from an even worse situation than yours.
2. Bankruptcy does not eliminate all the debt
There are varied forms of debt: some are so staunch even bankruptcy can’t eliminate. For instance, taxes—apart from income taxes—which are less than three years old will always stick with you long after you have fulfilled the filing process. Other taxes, including payroll taxes will never be discharged. This only means that if your reason for filing for bankruptcy was mainly driven by the need to shake off that tax debt; your problem will not be solved. They will hardly tell you this.
3. Your Next Bankruptcy Filing will be in 8 Years
If you file for Bankruptcy now, your next shot will be in 8 Years! While this might be a positive thing, it will be a nightmare if, in a couple of years, you plunge into a similar tumultuous situation, but there will be no aid this time! Have a clear mindset before you go bankrupt.
4. Student Loan is Never Discharged
A number of people are motivated to file for bankruptcy so that they can be freed from repaying the burdening student loans. What they do not know is that an amendment was introduced in the year 2005 to bar those who have been declared bankrupt from evading the repayment of their student loans. There is a legal loophole to those who are in real financial hardships. But still, the requirement for a hardship status is unrealistic! In itself, the process towards the declaration of hardship is long, cruel and mission impossible!
Therefore, you better be on the lookout for other options to free yourself from the student loan trap. There are numerous organizations in the country that offer assistance to the borrowers of student loans who show clear signs of financial hardships.
5. The Bankruptcy Imprint will be Semi-Permanent in your Credit Report
10 years is a really long time to have a bankruptcy on the credit report. Though it won't make any ruins on your credit rating, it surely influences the decisions made by the credit lenders for that period of time—negatively on most occasions.
6. Bankruptcy will only Worsen your Credit Score
Credit companies are in the business to make a profit, just like any other. No company is willing to extend a helping hand to a person in financial difficulties, especially if there is no indication that the person can make a comeback. That is why filing for bankruptcy is like declaring your incompetence. Many who underwent the process are baffled to learn that their credit rating has significantly dropped. You do not want to be one of those.
7. Chances of Losing your Assets are Very High
Should you file for a chapter 7 bankruptcies, your assets will be liquidated. What this means is that your assets can be seized by a trustee to your bankruptcy, especially if you took no precaution to protect your assets via exemption laws. Eventually, the liquidated resources will be distributed to the creditors as a means of settling the debt, hence your loss of assets.
8. Interference to Securing a Job
It is common these days to be asked to disclose your bankruptcy status at an interview. Nobody wants to hire a person in financial difficulties as their levels of competency at the workplace can easily be compromised by the situation. They have a notion that you have enough troubles to deal with already, how then are you going to successfully handle the task at hand? It is a hard question but genuine!
9. Inheritance Entitlement
It is a bad idea to file for bankruptcy if you contemplate receiving some inheritance in the foreseeable future. What bankruptcy does is that if indeed you received a share, your trustee has an authority to use part of it to cover the creditors’ debt. It also means that you have submitted all the power over your lifetime resources to a second party, whereby he can spend it as he deems fit until the bankruptcy period lapses.
10. Non-Guaranteed Business Debt
It is a fact that Bankruptcy serves as an insurance to business owners—those with personal guarantees. If you do not have a guarantee and you declare bankruptcy for your business, your personal property can find a way to the hands of your creditors!
My name is Craig R. Chlarson. Whether you are seeking to eliminate your debt, typically through a chapter 7 filing, or whether you are seeking to reorganize your debt, typically through a chapter 13 filing, or even if you have basic bankruptcy questions, call me today. I can help you.
To schedule an appointment, call (435) 901-3449
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