Bankruptcy Pros and Cons
What are the disadvantages?
Since your bankruptcy filing will remain on your credit record for up to ten years, it may affect your future finances. A bankruptcy is a troublesome item in your credit record, but often debtors who file already have a troublesome history.
In one respect, bankruptcy may improve your credit records. Because Chapter 7 provides for a discharge of debts no more than once every eight years, lenders know that a credit applicant who has just emerged from Chapter 7 cannot soon repeat the process.
Research in this area has produced mixed results. A study by the Credit Research Center at Purdue University found that about one-third of consumers who filed for bankruptcy had obtained lines of credit within three years of filing; one-half had obtained them within five years. However, the new credit itself may reflect the record of bankruptcy. For example, if you might have been eligible for a bank card with a 14 percent rate before bankruptcy, the best card that you can get after bankruptcy might carry a rate of 20 percent—or you might have to rely on a card secured by a deposit that you make with the credit card issuer.
>>What exactly is bankruptcy?
>>What is the process of filing for bankruptcy?
>>Right now, I cannot pay my debts. Besides bankruptcy, do I have any options?
>>Is there anybody in particular I should contact about these options?
>>I owe money to many creditors. What should I do?
>>What are the advantages of filing for bankruptcy?
>>What are the disadvantages?