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Four Ways Bankruptcy Can Follow You for Years

Posted on in Bankruptcy
Four Ways Bankruptcy Can Follow You for Years

Filing for bankruptcy could be one of the best decisions you ever make, but it is a decision that has consequences and should not be taken lightly. In fact, bankruptcy might not be the right choice for you, depending on your circumstances. Before making any drastic decisions about how to manage your debt, consult with an experienced bankruptcy attorney.
Keep these long-term consequences in mind as you learn more about the topic.

Bankruptcy Stays on Your Credit Report for Years

When you file for bankruptcy, that bankruptcy stays on your credit report for up to 10 years. This is visible to any party that pulls your credit report, such as a bank or other lending institution when you decide to purchase a home, car, or take out another type of loan.
This does not mean that you cannot get a new loan or open a new credit card. In fact, doing these things can actually help you repair your credit by giving you the opportunity to build positive credit.

Certain Debts Do Not Go Away

Some types of debt, such as child support, debt for money earned through fraud, and in many situations, student loan debt, cannot be discharged. Thus, these debts follow their holders for years, even the rest of their lives and must be paid with funds from the holder's estate after his or her death.

Your Bankruptcy is Everybody's Business

Filing for bankruptcy is not glamorous. When you file for bankruptcy, it becomes public domain, which means that information about when and which chapter of bankruptcy you filed is accessible by any party that wants this information. These parties might include employers, lenders, and even prospective partners. Although bankruptcy should not be a reason to feel ashamed or embarrassed, it is important that you know how to discuss your bankruptcy in the event it comes up in conversation.

When Assets are Liquidated, They are Gone

This might sound simple, but allow it to sink in: when you file for Chapter 7 bankruptcy, a court trustee oversees the liquidation of your nonexempt property to repay your debt. You will get to keep your house, your car, and any items that you need for work, such as your computer or a drafting table. But the assets that you own for pleasure, such as a snowmobile, a sports car for the weekend, video game systems, and jewelry, reminders of a certain lifestyle or relationship, can all be sold.

Work with a Chicago Bankruptcy Attorney

Filing for bankruptcy is a big decision. If you are considering filing for bankruptcy to take control over your debt and your financial future, consider all the risks and potential repercussions that come with this decision. Talk them over with an experienced Illinois bankruptcy attorney to determine which risks are most likely to become an issue for you and your case. At Newland & Newland, LLP, we can talk through your decision with you to help you determine the right course of action.

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