Filing for bankruptcy is an intimidating prospect. One of the most common fears is that bankruptcy will result in a lifetime of negative consequences that you’ll never be able to recover from. While it’s an understandable fear, it’s also an unfounded one. Bankruptcy will have a negative impact on your life – but only at first. It’s part of the bankruptcy process, but the long-term positive effects will far outweigh the short-term bad. It’s important that you understand the bad, though.
Here, we’ll provide honest answers to some common questions regarding the negative effects bankruptcy may have on your life.
Bankruptcy will negatively affect your credit score, and it can remain on your credit report for up to eight years. However, there is a good chance that if you are considering bankruptcy (or have already gone through it) then you were already behind on your loan payments, anyway – which means that your credit has already taken a hit. The good news is that since bankruptcy erases so much of your bad debt, it puts you in a much better position moving forward to improve your credit and build a healthier report. It’s important to note here that you should monitor your credit report closely after bankruptcy, to ensure that you no longer show an outstanding balance on any of your discharged debts.
It can also be difficult to obtain a credit card after bankruptcy, but there are some options available to you.
- Use a debit card. While it is attached to and pulls from your bank account, debit cards can be used in the same manner as credit cards.
- Keep an existing credit card. Under certain circumstances, you may be able to get approval from one of your creditors to keep a credit card that you possessed before the bankruptcy.
- Obtain a secured credit card. This is my favorite option. Use collateral, such as the funds in your bank account, to get a secured credit card. It’s very easy to get approved and this helps you rebuild your credit in a really quick way.
Will any of my debt remain after bankruptcy?
The majority of your unsecured debt will be discharged in the bankruptcy. However, there are some unsecured debts that are considered non-dischargeable. After your discharge is entered, you would still be liable for these obligations, which may include:
After bankruptcy you are permitted to own property. First, you will be able to keep all the property that is considered exempt pursuant to California law.
You can also keep any property that you obtain after the bankruptcy proceedings are over, with one exception. If you receive insurance benefits, inheritance, or settlements within 180 days after the close of the bankruptcy, this money or property may have to be paid to creditors (if it is not exempt property).
For further information, questions about filing bankruptcy, or if you believe you have been discriminated against due to your bankruptcy filing, it is in your best interest to seek the advice and counsel of the highly experienced and reputable bankruptcy attorneys in Los Angeles at Vokshori Law Group. Vokshori Law Group is a leading loan modification and bankruptcy law firm in California and truly believes in the motto “People First. Law Second.” and will fight for you until you win. To schedule a free consultation, please visit www.VokLaw.com or call 213.986.4323 today.