Nearly everyone has some debt. While some people only have a mortgage on their home and a small credit card balance, others are overwhelmed by their debts. A few people won’t even open their mail because they know they can’t pay the bills, and they don’t want to see how much the balance has increased from the prior month. Bankruptcy in Hamilton, OH might be an option for anyone whose debts are causing them distress. However, it’s important to know that bankruptcy does have consequences.
There are a number of advantages to filing personal bankruptcy. Whether a person uses chapter 7 or chapter 13, they can significantly reduce their overall debt as well as their anxiety. Since creditors are prohibited from contacting individuals in bankruptcy, a filer will have a reprieve from the harassment that is common for anyone who is behind on their bills. By choosing these benefits, the filer must also accept the negative aspects of using bankruptcy as a form of debt reduction.
Evidence of the filing will remain on a person’s credit report for up to 10 years. Every potential lender will see that they used bankruptcy to resolve their debts, and this will make them a higher credit risk. Some lenders target people who recently filed bankruptcy, so it might be possible to get a loan for a car shortly after the former debts are discharged. A few lenders might ask if an applicant has ever filed bankruptcy when they apply for credit. In these instances, filing bankruptcy may have long-term consequences that extend beyond 10 years.
Before filing for bankruptcy protection, it’s important to explore every possible alternative. Someone like R. Dean Snyder Attorney could help a client examine other possibilities in order to avoid the potential consequences of bankruptcy. Of course, in many cases, bankruptcy is the best option and can give a person the relief they need to be free from credit harassment and excessive debt. Whether a client chooses to file bankruptcy or go with a less extreme option, it’s important to examine the reasons they go into financial trouble so they can avoid the same problems in the future.
