The majority today is heavily in debt and bankruptcy is nothing new anymore. But, even when the situation is dire, many people are afraid of filing for bankruptcy. This is mostly because of the plethora of misinformation out there. Understanding the laws, the possibilities and the implications of bankruptcy are very important. Knowing what life has in store after declaring bankruptcy is crucial before you even consider filing for it.
Despite common belief, bankruptcy will not necessarily prevent you from getting credit. In today's competitive lending market there are many lenders who are willing to take a risk in offering credit. Of course, the limit will be lower than usual, and the interest rates may be higher than before, but applying for credit after bankruptcy need not be the wild goose chase it's made out to be.
Another fear people have is mortgage and home ownership. You might wonder if you can find a lender to give you a loan or approve your mortgage if you file bankruptcy. The answer, again, is yes, you can, but you might need to show a good track record of eighteen months to two years to get this. Contrary to popular belief, lenders do not steer completely clear of people who have ever filed for bankruptcy.
Finally, what about your pension savings? How will they be affected by your bankruptcy? Hopefully, not at all. Most pensions and savings plans are exempt from your estate upon bankruptcy, so they can't be liquidated to repay your debts. However, there are exceptions to this rule. Outstanding tax liens are not generally forgiven after bankruptcy, so any taxes owed may be attached to your 401K, IRA, or other savings plan. You should bear this in mind before considering bankruptcy.
Before you decide to file for bankruptcy, seek professional help. A professional financial advisor will be able to provide you with relevant information as suitable for your personal situation.
Despite common belief, bankruptcy will not necessarily prevent you from getting credit. In today's competitive lending market there are many lenders who are willing to take a risk in offering credit. Of course, the limit will be lower than usual, and the interest rates may be higher than before, but applying for credit after bankruptcy need not be the wild goose chase it's made out to be.
Another fear people have is mortgage and home ownership. You might wonder if you can find a lender to give you a loan or approve your mortgage if you file bankruptcy. The answer, again, is yes, you can, but you might need to show a good track record of eighteen months to two years to get this. Contrary to popular belief, lenders do not steer completely clear of people who have ever filed for bankruptcy.
Finally, what about your pension savings? How will they be affected by your bankruptcy? Hopefully, not at all. Most pensions and savings plans are exempt from your estate upon bankruptcy, so they can't be liquidated to repay your debts. However, there are exceptions to this rule. Outstanding tax liens are not generally forgiven after bankruptcy, so any taxes owed may be attached to your 401K, IRA, or other savings plan. You should bear this in mind before considering bankruptcy.
Before you decide to file for bankruptcy, seek professional help. A professional financial advisor will be able to provide you with relevant information as suitable for your personal situation.
About the Author:
Gary Pearson is an accomplished author.
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