Financial hardships happen. Mistakes occur. Disasters and tragedies that cost money are real events in people’s lives. Business fail. Credit card debt gets out of control. But there’s always a light at the end of the tunnel for people willing to work hard to get out of those situations. And sometimes, the big reset button of bankruptcy is the way to go.
But, there are most certainly consequences to that decision, which means you shouldn’t make it before being completely informed about the legality and end result of making the bankruptcy claim. To move you in the right direction, read your bankruptcy FAQs, research the student loan issue, looking into credit rating consequences, consider alternatives, and make it a family decision.
Read Your FAQs
Many legal firms have bankruptcy FAQs that you can read online, and almost all of your general questions are going to be answered there. If you have a question in your mind about the matter, chances are that someone has asked it before, so rather that trying to find the details in scattered places, going to that central site is going to save you some time and give you accurate, up to date information as well.
Research Student Loans
One of the biggest financial burdens on many people nowadays is the specter of student loans. And bankruptcy laws are a little bit different concerning those legal implications than with other financial issues. In fact, you may find that student loans are some of the few types that there’s very little ‘forgiveness’ for, which means that even after declaring bankruptcy, you may have to have a serious repayment plan in place.
What Does It Mean For Your Credit Rating?
And bankruptcy puts some stress on your credit rating. So if you decide to declare, and then later you have applications that require a credit check, don’t be surprised if for several years it takes a pretty strong hit, especially if your credit rating was low before filing. Housing applications are a big one where this may be a factor.
What Are Your Alternatives?
There are several alternatives to bankruptcy. There are ways to remortgage homes and businesses, ways to get short and long-term loans that have fewer consequences, and it’s even not a bad idea to get small loans from friends and family if you can.
Make It a Family Decision
And when it does come time to decide, if you’re an adult with a family, make sure that you make bankruptcy a family decision. Your spouse will most certainly be affected, especially if you have combined bank accounts, so the more discussions you have about the pros and cons, the better. Parents may have advice or suggestions about financial concerns as well.