Deciding to file bankruptcy is a serious decision. A bankruptcy can remain on your credit report for seven to 10 years. It may be more challenging to get new credit such as credit cards, mortgages and personal loans during that time. If you can secure credit, like an auto loan, you may be looking at higher interest rates, larger down payments and the possibility of needing a co-signer.
If you plan on including debt in your bankruptcy, then you may want to consider no longer making any payments. However, you’ll likely begin to receive collection calls and notices in the mail if you do this. If you have student loans, then it’s advisable to continue making payments on them since they will most likely be unable to be discharged in bankruptcy.
You should avoid taking out any new loans, and stop using credit cards that you plan to have your debts discharged in your bankruptcy. You should steer clear of any excessive or frivolous spending in the six months leading to you filing bankruptcy. Courts tend to be very suspicious of any large purchases that take place just before someone filings occur.
If you are considering filing bankruptcy, then you must be familiar with the pros and cons of doing so. There’s a difference between Chapter 7 and Chapter 13 bankruptcy, and depending on your financial circumstances, one or the other option may be right for you. Your situation may also be better suited for a different type of debt relief.
An experienced bankruptcy attorney here in Cleveland can sit down with you and go over your financial situation then recommend what option you may want to pursue to tackle your debt here in Tennessee.