The B-word, bankruptcy, can bring up all sorts of vile images of forever being unable to obtain credit and climb back out of the pit of financial troubles. In reality, bankruptcy is a fresh start, not the black of hole of despair. If you are thinking of filing bankruptcy, but have qualms about it or wrestling over a some nagging questions in your mind, you need to get answers before making a decision. There a some questions that many first-time filers have and having this bugging questions answered can help you feel better about the bankruptcy process.
Will Filing Damage Your Credit Forever?
Will bankruptcy damage your credit? The answer is yes, but not forever. The bankruptcy information stays on your credit report for up to 10 years from the date the bankruptcy is filed for Chapter 7, and about 7 years for Chapter 13. This means that for the first 7 to 10 years after filing anytime you try to obtain a loan for a new car, home, or anything, your bankruptcy will be a factor.
Even after filing bankruptcy your odds of obtaining credit are very good. With a little work and perseverance, you can reestablish your credit fairly quickly. You can do this by getting a new credit card and using it wisely. Many credit card companies offer cards to bankruptcy filers because new filers have a clean slate and cannot file again for many years. However, you may be required to pay higher interest rates for a few years until your credit rating is fully restored.
Will Filing Bankruptcy Affect My Job?
Filing bankruptcy should not have any negative impact on your current job. Federal law prohibits your employer from firing you or discriminating against you because you filed for bankruptcy. Unless you tell your employer you filed, he or she will probably never know.
However, if you are looking for a new job, your prospective employers are entitled to check your credit report before hiring you. And, a poor credit report or a bankruptcy may lead to a rejection of your employment application.
So, if you already have a job, there should not be any negative impact. If you're looking for a new job, you may run into problems.
Will My Spouse Have To File Too?
Just because you file, it doesn't always mean your spouse must file with you. The only time you are responsible for your spouse's debts is if you cosigned and promised to cover that debt. However, whether you are responsible for your spouses debts can depend on where you live. Some states, like New Mexico, Texas, Nevada, Idaho, California, are community property states. This means that property belonging to both spouses is subject to debts incurred by either spouse. Community property includes you and your spouse's earnings and any acquired property during the marriage, with the exception of gifts and inheritance.
If you live in a community property state, it may be best to have your spouse file with you. If you file Chapter 7, you must list all your creditors, even those you share with your spouse.
If you have any further questions, make sure to consult an attorney from a firm like Thornton, Coy & Huss, P.L.L.C. While you do have to pay a bankruptcy attorney for his or her legal help, it is in your best interest to make sure all your questions are answered, and your bankruptcy is filed correctly. Making even a small mistake can lead to a dismissal of your petition.