Bankruptcy: How do you know if it is right for you?
- If you are paying out more than you make in a month on your housing, cars and monthly expenses then bankruptcy is right for you.
- If you have had a serious medical emergency that has left you out of work for a period of time and with medical bills, you are unsure how to pay then bankruptcy is right for you.
- If you have fallen behind on your mortgage and are at risk of losing your home then bankruptcy is right for you.
The stigma that filing bankruptcy carried is no longer what it was. If you file a chapter 7 bankruptcy you will be able to buy a house again about 3 years out of bankruptcy – depending on the type of loan for which you apply. Most people who file bankruptcy are able to get credit to buy a car the day after they receive their bankruptcy discharge – about 90 days from filing the bankruptcy. The interest rate will be high, but you will not be left without transportation. After the filing you can start to rebuild your credit by using a secured credit card and paying it off each month to show a credit history of paying as agreed. If you need to rent a house or an apartment after you file most filers are able to do so. You may not get the first place that you apply for but it normal to get one of your top three.
Bankruptcy does stay on your credit report for 10 years – just like any bad debt – but if you file you are starting to repair your credit instead of just sitting there with a low credit score and thinking that you have no way out.