Given the complexities of bankruptcy and the fear that many people feel about the process, there are two common questions that people have when they discuss the issue with an attorney. The first is “what are the legal and logistical processes for a bankruptcy filing?” The second is “what impact will the bankruptcy have on my life, both immediately and well into the future?”
We’ve answered many matters related to the first question in recent weeks, so today we turn our attention to the second question: what impact will the bankruptcy have on my life, today and years from now?
There are two immediate “positives” that you will feel after filing for bankruptcy, and two immediate “negatives.” The positives are that your debts will be eliminated through bankruptcy, either by way of liquidation and debt discharge (in the case of Chapter 7), or through debt reorganization and a repayment plan )in the case of Chapter 13); and creditors will immediately have to stop contacting you in an effort to collect debt.
The negatives are that you will not be able to file for bankruptcy again for a long time, and your credit score will take a hit — one that will be difficult to recover from.
Years from now, though, you could see massive improvements to your financial situation and your life if you follow through on your bankruptcy and take needed steps towards establishing financially responsible practices. By doing this, the long term negative impact of a bankruptcy can be minimized.