You're considering the most difficult financial decision you will ever have to make: declaring Chapter 7 bankruptcy. You're looking ahead to the storm clouds lifting. The harassing phone calls stopping, the stress melting away.
All of that is at least partially true, and your life really will be easier. But at Vohwinkel & Associates, bankruptcy lawyers Las Vegas, we feel there's more value (and honesty) in a frank discussion of the long-term ramifications. It's a mixed bag. Let's look closer.
NO MORE THREATENING PHONE CALLS
When your Chapter 7 filing is discharged, it will indeed mean an end to the constant debt collector phone calls. Or at least most of them. You'll still have to restart your mortgage payments if you want to keep your primary residence. You must continue to make your car payments to keep it and probably still pay down your student loans. So it's not like your bill-paying days are over.
However, having erased your high-balance and high-interest credit card debt and other outstanding loans should free up your income considerably. Now it (hopefully) won't be as difficult to stay current on those bills you couldn't discharge as it used to be. So that's certainly a positive outcome.
As mentioned, it's not all ponies and rainbows. You might still be fighting to keep your house out of foreclosure, for instance. But assuming that you and/or your significant other are still employed, you should have more discretionary income for building a much-needed financial cushion and funding your retirement plans.
You might also find that some credit card companies want to connect. You think this is unlikely with your recent credit history, but they see you with little outstanding debt and know that you can't declare bankruptcy again for quite some time. Just make sure you don't get back into the bad spending and borrowing habits that perhaps got you into trouble in the first place. And carefully read the lending terms. Not all cards are equal.
Yes, your credit score will certainly take a hit. And the bankruptcy will show up on all of the major credit reporting agencies for about seven to 10 years. That will negatively impact your ability to borrow for a home and could even keep you from getting some jobs.
The good news is that your score can grow just like it can plummet. Be patient. Pay your bills on time and focus on responsible financial management. Then watch your credit score slowly climb.
If you're thinking about the possibility of personal bankruptcy, first contact Vohwinkel & Associates today, a trusted bankruptcy attorney Las Vegas. We look forward to serving your needs and relieving your financial stress.