If financial stress is causing you to consider filing for bankruptcy, you need to be aware of the consequences of doing so. While it can help you reorganize your finances, get creditors off your back, and perhaps have some debts discharged, it can also affect your credit history for many years to come. When you consult bankruptcy attorneys in Brick, NJ, they can explain what will happen when you file for bankruptcy.
Credit Report Effects
The amount of time a bankruptcy stays on your credit report will depend on the type of bankruptcy that’s filed. If it is a Chapter 7 bankruptcy, which allows for most unsecured debts to be discharged, it will stay on your credit report for 10 years. If a Chapter 13 was filed, in which you repay your debts after reorganization, it will be on your credit history for seven years.
Eliminate Debts
While having a bankruptcy on your credit history can make it difficult to secure loans in the future, it has some positive effects as well. If you qualify for a Chapter 7 bankruptcy, you can get rid of most of your debt and continue on with your life without those burdens. You can find out if you qualify for Chapter 7 when you consult bankruptcy attorneys about filing bankruptcy.
Shorten Debt Payments
While a Chapter 13 bankruptcy will not completely discharge debts, it can shorten how long you will have to repay your debts. For most debts, you will only have to repay them for 36 to 60 months and then the balance will be discharged. As bankruptcy attorneys will advise you, a Chapter 13 is helpful because you can reorganize your debts and remove the pressure on you from creditors. You can make payments that you can afford and get your financial life back in order.
