The Impact on Your Financial Future After Bankruptcy

When somebody is getting ready to or already has filed for bankruptcy, they might wonder what impact it will have on the rest of their lives. There are many times in our lives when we might think that it is time to file for a loan or when our credit score needs to be at its highest. This is why, after bankruptcy, many people fear that their decision could have a huge and lasting impact on these parts of their lives.

Bankruptcy is supposed to be a fresh start, which is why many people engage in the process so that they can get back on track financially. In fact, in 2017 alone, over 790,000 individuals and businesses filed. Unfortunately, many people do not realize that there is a rebuilding process that they will have to endure. Things could be difficult for a small amount of time, which is why it is important to be prepared.

Financials That Are Impacted After Bankruptcy 

Loans: Many loan companies will take your bankruptcy past into consideration when they dictate whether or not to give you a loan. Many types of bankruptcy, including Chapter 7 and Chapter 13, will have a major impact on your credit scores, which can sometimes make it more difficult to get certain types of loans. This is because, when lenders look at your financial past and see a bankruptcy, they view you as a high risk. They see it as more “expensive” for you to borrow money, which means that you might be charged a higher interest rate on a loan after you endure this process. It all comes down to finding the right bank or lender so that you can build that trust once more. 

Credit: Bankruptcy can also impact your credit score and cause it to plummet. Researchers, in fact, have recently found that 65 percent of people had a credit score of 640 or above two years after they filed for bankruptcy. Within five years, only a portion of these same people had a credit score that made it possible for them to receive a decent loan. This means that you might not qualify for certain loans such as mortgages and car loans, which is why you might be faced with waiting before making your next big purchase after bankruptcy.

How Time is On Your Side 

After bankruptcy, time is your best friend when making strides in your personal life. As the years go by and time passes, the impact of bankruptcy on your credit score will fade away if no new marks are made. This means that, when bills are paid on time, you can regain normalcy in your life. You will start to show loan companies that you have a positive credit score and that you can be trusted with a loan once more. Lenders will start to see your confidence and might be more likely to give you a loan so that you can get back on track and work toward the things that are most important to you.

Speaking with an Attorney About Bankruptcy 

Bankruptcy can be a difficult thing to experience but something that many businesses endure every year. At MJ Watson and Associates, our skilled bankruptcy attorneys in Texas have helped many businesses and parties work through financial hardship and are dedicated to helping you get back on track after you have filed for bankruptcy. It might be a huge decision and you might be afraid of what is to come, but you have options. Please contact our law firm at (214) 965-8240 to find out what options are available for you at this time.