Because of the recent economic turmoil that our country experienced, many were left with no choice but to file for bankruptcy. Years ago, bankruptcy was perceived differently. Just the thought of it was embarrassing for most. However, this is no longer the case today. Many are welcoming the idea to shelter their remaining assets.
This also gives them opportunity to allocate payments for their existing debts. However, bankruptcy comes with a price. This will affect your credit acquisition in the future. It also affects you employment application as well as your search for a home to rent.
It is a great option for most because this gives them the chance to rebuild their credit. This is a good start. However, this will not be easy. As mentioned earlier, this can pull down your credit. If you want to establish it again, you need to be current with your payments.
Among the effects of bankruptcy is the difficulty to acquire credit. Lenders are hesitant to lend you any amount because of the risk that you may not be able to pay them back. Although this can be a challenge, there are still banks and financial firms that can lend you the amount you need. However, the interest rates and the down payment will be higher. They will also require that the loan be secured. This term will definitely make it difficult for you to pay off your debts.
It is essential that you keep on trying to rebuild your credit. You can do this by paying off your debts. You should also be current in paying your obligations. This can help you once you decide to acquire a mortgage loan. Most banks will let you borrow from them after two to three years of filing for bankruptcy. However, you have to be certain that you have a good credit standing during that time. Not all lenders are up for this though. You need to contact multiple lenders and ask for the requirements. Even if you do not have a perfect credit, you should still exert efforts to find lenders for your current financial state. A bankruptcy lawyer can help you with this.
Bankruptcy will also be asked when you look for a new job. Most employers will ask this during the evaluation of applicants. If you are asked about this, you have to be honest. Lying about this can lead to your termination. You need to disclose such information even if this took place years ago.
This will also affect the decision of the landlords. If you look for a home to rent, the property owner will ask for your credit report before offering a lease. It may be difficult to convince the property owner to accept you.
Although it is difficult, you can still find a landlord who will be willing to welcome you in their property. Just assure them that you will pay your dues on time.
Bankruptcy is essential for some because it gives them a chance to start over again. However, it will greatly affect them. It will not be easy to acquire any form of credit. However, if they are current with their payments, they will likely get a good term for their mortgage loan.