Debt relief: what is the best option? The truth is, the answer to that question will be different for everyone. For some Kentucky residents, bankruptcy seems to be the obvious choice, but it is not something to jump into without thinking of the long-term consequences first. Below, we discuss how bankruptcy can affect you after your case is done, so you know what to expect.
How Does Bankruptcy Affect My Credit Report?
A bankruptcy filing will stay on your credit report for 7 to 10 years, and you can expect an initial hit to your credit score.
But chances are, your credit score was likely already much lower due to your debts and late payments. After your bankruptcy case is over, you can immediately start to rebuild your credit by opening a new credit card and paying off the balance on time every month. Over time, your credit score will slowly start to recover as long as you maintain healthy budgeting and spending habits.
Will I Be Able to Get a Loan After Filing for Bankruptcy?
Creditors will be able to see a bankruptcy on your file, and you could find it harder to obtain loans or lines of credit with fair interest rates. But that does not mean it will be impossible to obtain a loan for a car or home. Lenders will typically offer loans with higher interest rates, so you could still be able to purchase a car or even a home with a bankruptcy on your credit report.
Explore Whether Bankruptcy Is Right for You
While bankruptcy does have some drawbacks and may not be the right option for everyone, it can be very effective for many debtors. The benefits of filing for bankruptcy can outweigh the concerns people may have about their credit score and having to live with the burden of growing debt.
Kentucky residents who are thinking about bankruptcy can ask our knowledgeable bankruptcy attorneys at Musselwhite Meinhart & Staples about the pros and cons of filing. With the assistance of legal counsel, it is possible to make an informed decision.
Schedule a free consultation today to get started.