How Will Bankruptcy Affect You? Here Are Five Ways
Filing bankruptcy can give you a new financial slate that can make it easier to move forward in your life. No longer dragged down by massive debt you cannot afford to repay, it is often a refreshing experience for those who are successful with it. Still, there are many ways bankruptcy will affect your life and before you start the process, it is important you know what those are. Below, our Orlando bankruptcy lawyer outlines five of the biggest ways bankruptcy will impact you.
Debt Becomes Easier to Manage
Regardless of the type of bankruptcy you file, your debt will become easier to manage. Through a Chapter 7 bankruptcy, you can discharge all or most of your unsecured debt. A Chapter 13 bankruptcy does not discharge your debt, but it does reorganize it into a payment plan that makes it more affordable to pay. When people think of how bankruptcy will affect their life, this is typically what they think of first.
The Automatic Stay
As soon as you file bankruptcy, the court will issue an automatic stay. This automatic stay prohibits debt collectors and creditors from contacting you to try and collect the debt. This means as soon as the paperwork is filed, you will no longer have to deal with a phone that is always ringing, letters from debt collection companies, and other annoying collection tactics.
Reduced Credit Score
Filing bankruptcy will result in a hit to your credit score. The debts you owed before the process will remain on your credit report, and the bankruptcy will show up on the report, too. This will lower your score and make you seem like a risky borrower to lenders and creditors. Still, the hit to your credit score is not as bad as most people imagine. You can also start to rebuild your score right away and it may be just a matter of months before your score increases again.
Bankruptcy is Public Information
Anything that happens in the courts becomes a matter of public record, and that includes bankruptcy proceedings. Very few people will go to the trouble of digging through court records, but employers and others may learn about your bankruptcy.
Loss of Property
If you file Chapter 7 bankruptcy, some of your assets may be sold so the proceeds can be distributed among your creditors and debt collectors. Each state outlines their own exemptions to this bankruptcy law, and Florida has some of the most generous exemptions in the country. Many people successfully file Chapter 7 bankruptcy in the state without losing any property at all.
Call Our Bankruptcy Lawyer in Orlando Today
Bankruptcy will affect your life in a number of ways. At Anderson & Ferrin, P.A., our Orlando bankruptcy lawyer will minimize the negative impacts while maximizing the benefits the process can bring. Call us now at 407-412-7041 or contact us online to schedule a free initial consultation with one of our experienced attorneys and to learn more about how we can help.