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The true cost of filing for bankruptcy

bankruptcy

bankruptcy

The true cost of bankruptcy is not just getting a good lawyer, filing papers with the court. You also have to deal with the stigma of having filed bankruptcy with the creditors and banks for years to come. These creditors will not be willing to offer any new credit once they come to know that you have got your debts discharged in the bankruptcy process.

When you are not in a situation to pay even pennies towards hundreds of thousands of dollars, filing for bankruptcy may be the only option to come out of these serious insurmountable debts.

Getting approved for new credit will be quite tough in the initial years after filing for bankruptcy. Creditors will go through your credit report and see how you have been handling your accounts in the past. Bankruptcy is considered to be a serious derogatory remark and most of the creditors will consider that person who filed for bankruptcy as a risk to their finance. You will have to first rebuild your credit ratings before you can get any good deals from the future lenders.

Losing your car, home and other valuable assets in the bankruptcy process can hurt your credit ratings. There are many famous people who have filed for a chapter 11 bankruptcy or a chapter 13 bankruptcy and were able to retain their car, home and other property. The cost of bankruptcy involves hiring an attorney, filing legal papers with the court and speaking to someone about your financial situation.

When you are in the process of filing for bankruptcy, consult an expert attorney for legal and financial advice. You will also have to deal with the IRS after filing for bankruptcy. You must make sure that you take a note of everything in the filing process, record the date, time, and the person you spoke to on the phone so that you are aware of every action.

It will be quite tough to get new credit in the beginning just after bankruptcy has been filed. Your life will not be completely ruined. This might be the best way to come out of your existing debts if you have tried all other options and nothing worked.

Make sure you, your spouse, and your children all know what is going on, and what will happen, since this will affect your family for some years to come. The cost of bankruptcy affects us all, in any situation.

If you are reading this article and are also a resident of the United Kingdom then you maybe able to get bankruptcy advice here.