Filing for bankruptcy should never be a light decision. While debts can be reduced or eliminated, allowing for a person to make a clean financial start, it can also be a time-consuming process that involves legal fees and a hit to the credit report. If a person decides to file for bankruptcy, their first step should be to consult with a bankruptcy attorney in order to ensure that the bankruptcy filing goes as smoothly as possible.
Effects of Bankruptcy & How to Minimize Impact
After filing for bankruptcy, a person is in for some long-term consequences. By knowing what these consequences are, a person will be better equipped to minimize their impact.
Some of the things to expect after filing for bankruptcy is:
Damage to the credit report
A drop in credit score that can last for up to ten years
Placement of the bankruptcy filing in public records
If a person is unsure about whether or not bankruptcy is the right option for their situation, they are encouraged to meet with a bankruptcy attorney. They may be able to provide alternatives to traditional bankruptcy, such as settling debts with creditors outside of court or working with a consolidation company.
Once a person is aware of how bankruptcy may affect them, they can take steps to minimize the impact of bankruptcy. One of the ways this can be done is by checking credit reports a few times a year to check on errors that may have been made. Staying diligent to check on debt can also help a person know when bankruptcy is due to be removed from their credit.
While checking in on debt, a person can begin rebuilding their credit by paying bills on time. A secured credit card may be the best way to do this until creditors determine that a person is responsible enough for a conventional credit card.
Filing for bankruptcy is serious business. For any questions or concerns that a person may have, schedule a free bankruptcy consultation with the Malaise Law Firm.