Filing for bankruptcy can be confusing and frustrating, but taking the steps to file for bankruptcy might be the solution to your financial troubles. At Craft Law Offices, our bankruptcy lawyers are ready to help. Contact us today to get started! We can help you decide whether filing for bankruptcy will be the best choice for you. Our offices are located in Greenville, Morehead City, and Rocky Mount, NC.
In one of our previous posts, we discussed the many advantages of filing for bankruptcy. Filing for bankruptcy is not always the right choice for everyone, and we want to be transparent about that. Finding a credible and trustworthy bankruptcy attorney is an important step in the right direction, as they will help you make your decision.
Be mindful about the timing of when you file for bankruptcy; filing at the wrong time can make a bad financial situation worse. If someone files too early, sometimes a person can lose their property that they otherwise might’ve been able to keep. Or, if someone files the wrong type of bankruptcy, this may come back to bite them.
Here are some potential disadvantages of filing for bankruptcy:
- Loss of credit cards. Many credit card companies automatically cancel any cards you hold when you file. You will probably receive numerous offers to apply for “unsecured” credit cards after filing. These can help you rebuild your credit, but usually require annual fees and high interest rates.
- Immediate impact on your credit score. Chapter 7 bankruptcy stays on a person’s credit report for 10 years in North Carolina, while a Chapter 13 remains for seven (7) years.
- Difficulty obtaining a mortgage or loan. A bankruptcy filing can make it difficult to get another loan or mortgage for many years.
- Loss of property and real estate. Sometimes not all personal property and real estate will fit under an exemption. This means the bankruptcy court could seize some of your property and sell it to pay your creditors.
- Denial of tax refunds. State, local and federal tax refunds can be denied because of bankruptcy.
- Job and housing stigma. Some potential employers and landlords ask questions about any recently-filed bankruptcies and this can negatively affect your chances for both.
- Non-Dischargeable debts. There are certain kinds of debt that cannot be discharged by bankruptcy. Non-dischargeable debts typically include alimony and child support, student loans, criminal restitution and fines, and any debts acquired through fraud.
Of course, some of the advantages of filing for bankruptcy can also be disadvantages and vise versa. This is because so much of a bankruptcy case depends on a person’s unique financial circumstances and needs. Therefore, many times a good outcome for someone filing bankruptcy might be a negative consequence for another.
Regardless of your financial situation, we want to talk through it with you and help you decide your next move. Don’t hesitate getting started with Craft Law Offices today.