The 3 Major Effects of Bankruptcy Filing That You Should Know

An Empty WalletFiling for bankruptcy is one way to get relief from personal debt. When considering this major financial move, there are repercussions that you need to know. 

As each person has a different financial situation, the effects may also differ. Thus, it is best to consult with your lawyer first before filing for bankruptcy in South Jordan.

Whether you decide to file for bankruptcy under Chapter 13 or 7, you will enjoy a significant financial relief. Chapter 13 will help you through a manageable repayment plan. Some of your debts will get a full discharge under Chapter 7.

After filing for bankruptcy, you may experience negative repercussions. For one, it may be difficult for you to find a job or get a loan. Over time, things will get better. You can enjoy the following benefits:

Cessation of Contact with Creditors

Legal protection known as automatic stay will take effect after filing a bankruptcy petition. This will prevent your creditors from getting in touch with you. You will not receive threats of garnishment, repossession, or foreclosure anymore through the mail or over the phone.

A Brand New Financial Beginning

The major benefit of filing for bankruptcy is having a fresh financial start. You will have the chance to rebuild your financial life. You don’t have to worry about repaying a big pile of debt. This way, your finances can be much stronger than before.

Better Credit Standing

After filing for bankruptcy, your credit score may suffer. Don't take this too personal, though. Hang on and continue to apply everything you learned in the debt education course. After a few months, you will be able to build a healthy and strong credit.

During the first few months after filing, you may encounter some negative repercussions. These will depend on your particular situation. The good thing is these are only temporary. In time, and with the help of your bankruptcy lawyer, you can get back on your feet. You will start to enjoy better finances.