If you are in serious debt, you may think that filing for bankruptcy is your only hope, but before doing so make sure you know all the facts and keep in mind that bankruptcy should be your last resort.
Bankruptcy is when a business or individual legally declared inability to pay its creditors.
There are different types of bankruptcy such as Chapter 9, Chapter 13, and more.
You have to file a petition, a statement of assets and liabilities.
Every state has bankruptcy courts.
What will happen to you after you file for bankruptcy? It depends.
You may have to pay a little of your debt off or a lot.
You can lose your house, but you might not.
The results of your bankruptcy will be determined by your specific case.
Bankruptcy will definitely affect your credit.
There are negative effects that a bankruptcy has on your credit.
Your credit score may drop 300 points or more.
This may lead to some difficulty when trying to get approved for credit cards.
One good thing that a bankruptcy can do to your credit is give you somewhat of a fresh start.
Now you have learned from your mistakes and hopefully won't repeat them.
Some credit issuers will approve you for credit cards because you tried to fix your mistakes unlike someone who still owes tremendous amounts.
You may also be able to get credit cards because you can't file for bankruptcy again for years.
The best tip for rebuilding your credit is to get a secured credit card and after about six months you may be able to get approved for unsecured credit cards.
Filing for bankruptcy can be scary, embarrassing and confusing.
It can also be a long process with a lot of laws and regulations involved.
However, the good news is that there are ways to recover and move on.