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What You Should Know About Filing For Bankruptcy / What You Should Know About Filing For Bankruptcy

What You Should Know About Filing For Bankruptcy

When a person is drowning in debt and there is no relief in sight, many times, they will start to think about filing for bankruptcy. Usually, the main consideration before taking such a drastic step is the lasting impression it will have on their credit.

The reality is there is a lot more that goes on when bankruptcy processes begin. Learn more about the financial costs, what it does to you personally, and how it affects a credit score.

Out-of-Pocket Charges
Going through all the bills and debt they already owe, someone who is considering bankruptcy rarely thinks about how much it is going to cost them. They are already in above their heads, so what’s an extra bill, right? Before starting the process to file for bankruptcy, you should know that it can get quite expensive.

If the proceedings are to be handled properly, you should hire an attorney who specializes in this area. Along with their fee, there will be court costs, filing fees, and more. The total cost can range anywhere from $1200 to $3000, depending on the attorney retained. It is recommended that you pick a high-quality attorney to increase your chances of seeing better results.

There is also the option of doing all the filing, paperwork, and court proceedings necessary yourself. This can be extremely difficult. The chances of the outcome being the best it could be is not favorable.

Personal Costs
Along with what bankruptcy does to your bank account, you are going to be affected personally as well. Feelings of guilt, failure, and defeat are likely to surface.

There is also a social stigma that comes along with filing for bankruptcy. People who know you have been through this process may be quick to judge. Unfortunately, bankruptcy filings are a matter of public record so there really is no way to hide it. Just be sure to keep the details as private as possible and family, friends, and neighbors will not be too curious.

When interviewing for a job, employers often check this record. Make sure to have a lot of positive attributes that you learned from the experience planned out to discuss, proving that you will be right for the job even though there is a blemish on your credit record.

Effects on Credit
What happens to a credit score may be the least damaging. The existing score may go down, but most creditors only look at history back two years. So, after 12 to 24 months, things will start looking up. After seven to ten years, it will be completely wiped from your record. It will be difficult to get the credit score up, but it’s not impossible.

Before filing for bankruptcy, it is a good idea to get in touch with a credit repair specialist or other professional in this field. They will be able to give an honest and accurate assessment of what should be done in any individual situation.

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