How does bankruptcy affect your credit report?
There are more and more people that are in financial freefalls or so deep in debt that they feel that their only choice to get out from under the mountain of debts is to file for Chapter 7 Bankruptcy to be able to get a fresh start with a clean financial slate. What they do not know though is that there are some serious financial complications that are going to follow them for many, many years to come. This is one of the negative sides of filing for bankruptcy.
The very first thing that you need to remember and be aware of is that you will have a bankruptcy on your credit report for at least ten (10) years after you file the paperwork and the legal proceedings start to clear out your debts. If you owe unpaid property taxes, student loans or child support, you need to remember that you will not be able to erase these debts by filing for bankruptcy. They will simply be paid from the proceeds of the court-ordered sale that goes along with a bankruptcy process. You are likely to lose all property except that which is exempted by state law in your state of residence.
If you have successfully gotten through the entire bankruptcy process, you are going to find that you are going to have a very difficult time getting credit for anything that you may need after the bankruptcy procedure is completed. You may not be able to get a new or newer car that requires financing. You also might not be able to get approved for a mortgage on a home, or even be able to take out a life insurance policy that will ensure that your family will be taken care of if your are crippled or killed.
You might also find that many employers are not going to be willing to hire you if you have a recent bankruptcy on your credit report. Believe it or not, potential employers do check your credit report! This is especially true if you are applying for a job in the financial sector (bank teller, loan officer, stock broker or the like). Those employers will want and need to see how you handle your own money and debts before they can allow you to handle hundreds, thousands and potentially millions in curreny that belongs to other people. If you have a recent bankruptcy on your credit report, you are very likely to br turned down for that position.
If you think that this is not that big of a deal, you really need to talk to those who have already gone through the bankruptcy process and ask them specifically what effects it had and has on their credit. You want to ask what they got turned down for because of the bankruptcy that is standing out on their credit report. Chances are that they will tell you some things that will leave you seriously shaken and seriously thinking twice before you file those bankruptcy papers.
