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
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
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
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 government’s 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 2015. <http://www.holderlawpc.com/blog/pros-and-cons-of-filing-for-bankruptcy/index.html>
TO LEARN MORE