As you have probably already heard, filing for bankruptcy isn’t just an easy way out of debt. It is often a last-resort option for people facing significant debt problems.
There are some negative consequences that result from filing for bankruptcy, which is why it’s important to take the decision to file seriously. It’s something that should be discussed carefully with an experienced bankruptcy attorney who you can trust.
So what are the biggest drawbacks of filing for bankruptcy?
First, bankruptcy cannot forgive all kinds of debt. Child support and alimony are considered non-dischargeable debt, and student loans and tax debts often cannot be forgiven through bankruptcy. That’s why the decision to file bankruptcy should depend on the type of debt you have.
Second, filing for bankruptcy will destroy your credit for a period of time. For example, a Chapter 7 bankruptcy can stay on your credit report for as long as 10 years. Additionally, even after the bankruptcy is removed from your credit report you still might have to disclose it to future lenders, employers or landlords.
Third, if you file for bankruptcy now you may not be able to do so again until many years later. Under the law, you must wait at least six years after filing for Chapter 7 or Chapter 13 bankruptcy before filing for Chapter 7 bankruptcy protection again.
With all that said, bankruptcy is still the best option for many Americans who are facing serious debt problems. An experienced bankruptcy attorney can help you way the potential benefits and drawbacks of filing for bankruptcy in your unique situation.