Negative effects of filing bankruptcy

While the aim of any bankruptcy proceeding is to provide debt relief to overwhelmed consumers, it is important not to lose sight of the possible negative effects of a bankruptcy. 

Regardless of any types, filing for bankruptcy may have long lasting negative effects on your credit record for up to 10 years. Some of the negative effects of filing for bankruptcy are as follows-

• Your financial details will be drawn and made available to the court and also to the creditors, which can have long lasting mental and social repercussions.
• Filing bankruptcy may lose your valuable or treasured assets, or even your business.
• It may become difficult to apply for future credit, getting house for rent, purchase a vehicle, and secure jobs that require a positive credit profile.
• Payments may be deducted from your pay checks for a long period of 5 years.
• The cost of filing bankruptcy may last long. As filing Chapter 13 bankruptcy remains on your credit history for seven years, and chapter 7 for ten years
• Banks or other credit companies may charge higher rate of interest and fees before giving loans.
• After filing petition for bankruptcy, the consumer debtors are required to attend credit counseling within 180 days
• To obtain a discharge, debtors should first complete a personal financial management education course.
• Filing bankruptcy may have severe negative impact on personal relationship. The pressure of bankruptcy leads to many separation or even divorce.