Bankruptcy: Should You Declare It?
Those with debt problems too often subscribe to groundless myths and hearsay without ever understanding the law, and therefore the implications, of bankruptcy. Therefore, those with unmanageable debt should be aware of a few key facts before filing for bankruptcy. After all, how else will they know what life will be like after declaring themselves bankrupt? Let us look briefly at a few implications of liquidation.
Despite common belief, bankruptcy will not necessarily prevent you from getting credit. In today’s competitive lending market there are many lenders who are willing to take a risk in offering credit. Of course, the limit will be lower than usual, and the interest rates may be higher than before, but applying for credit after bankruptcy need not be the wild goose chase it’s made out to be.
What about home ownership? Is it possible to get a loan or mortgage after bankruptcy? Well, many lenders have been known to approve a mortgage to bankruptcy debtors in as little as 18 months after their liquidation. Again, there are lenders who are willing to take the risk, and many are willing to look at bankruptcy as a sign of your past problems with money, not as a warning about your future.
Also, if you are worried about how bankruptcy might affect your pension and life savings, the chances are they won’t be affected at all. In the majority of bankruptcy cases, pensions and savings are not included in the liquidation process. There are some exceptional circumstances, such as when you have outstanding tax liens. Under such circumstances, your savings and pensions may be deducted for your liabilities.
In any case, the best advice is always to seek professional counsel. A dedicated financial advisor can let you know all the facts about bankruptcy, as well as its implications. Only then can you make the right decision for you.
Filed under: Business