Understanding The Long-Term Ramifications Of Filing Bankruptcy
When hit by serious financial issues, such as the loss of a job or an avalanche of bills after an expensive medical emergency, it can be tempting to think about wiping your debt slate clean by filing bankruptcy. Even though it can be an extremely helpful tool in certain situations, bankruptcy is not a process that should ever be considered without understanding all the possible ways in which the decision may affect your life in the future. If you are suffering some type of serious financial stress and are now looking at filing either Chapter 7 or Chapter 13 bankruptcy, here are some things to consider before you take action.
A Matter of Public Record
If you work, or expect to work in any high profile occupation or one that requires a security clearance, you should know that filing bankruptcy is a matter of public record that future employers, as well as the general public can access. In addition, this information will be part of your credit report for seven to ten years and could still affect your ability to get a mortgage or other type of loan even after the ten year mark has passed.
A Housing Problem
While most people who file bankruptcy understand that doing so makes it much more difficult to obtain a mortgage, many fail to recognize that it can also make it extremely difficult to rent or lease a home. Landlords and property management companies who routinely obtain your credit report during the rental application process may use the existence of a past bankruptcy, especially one that has not yet been discharged, to avoid renting to you.
The Tax and Student Loan Limitation
Unpaid federal, state and local taxes, and student loan debts are major sources of financial stress for many Americans, yet these debts are seldom cleared away by filing bankruptcy. In some cases, old federal income tax debt may be included in a bankruptcy, but even when allowed, the bankruptcy will not remedy any tax liens that have been previously recorded. Student loans, another form of federal debt, are also not erased by filing bankruptcy.
Because each person and their financial situation is different, the best way to decide how filing bankruptcy will affect you, both now and in the future, is to meet with an attorney who specializes in both Chapter 7 and Chapter 13 bankruptcy filings (such as John G Rhyne Attorney At Law). They will be able to provide complete information about the inclusion or exclusion of each of your debts, what the filing will cost, and how the filing may affect your future life and occupation.