There is a lot of information to be found about the damage bankruptcy can do to your future. There is also plenty of information about its benefits. It is likely that you have heard exaggerated stories on both sides of the issue. So which is true? Maybe both. As with all things in life, there are pros and cons to each situation, and you will need to weigh them all carefully before deciding what is best for you. Here are some things you should know about a Chapter 7 bankruptcy in Tennessee, which does not involve a repayment plan.
Your credit is ruined for years
FindLaw explains that you may have heard horror stories about how long a bankruptcy stays on your credit report and that you won’t be able to purchase anything by credit for 10 years. It is true that a bankruptcy can stay on your credit report for several years. However, you can also ruin your credit by missing a payment or two on a mortgage, having your car repossessed and being sued for non-payment of credit-card debt.
You will not be able to keep your credit cards
You will likely be offered new credit cards from some companies after a year or two. They are also likely to come with high-interest rates due to the credit risk. It may or may not be worth it to you as a step in rebuilding your credit, and after a period of on-time payments, you may be able to have the interest rates lowered.
A bankruptcy means you cannot get a mortgage
Like credit-card companies, there are some lenders who will work with people who have bankruptcies and other credit problems. Some lenders even specialize in working with “bad risks.” The same rules about rebuilding your credit by making on-time payments also apply in this situation.
You may still have to pay some debts
Yes, it is true that you may be required to pay some debts even after your bankruptcy is finalized, such as a car loan or mortgage. That is only fair if you are keeping these big-ticket items. Besides, having your other debts discharged means you should have no trouble making payments on those items.
There are still several questions you may have about bankruptcy. An attorney who specializes in bankruptcies can explain the proceedings and discuss your options.
This article contains general information about bankruptcy and should not replace an attorney's advice.