September 3, 2021 | Bankruptcy

The decision to file for bankruptcy is not one that should be taken lightly. There are various things you should consider before you decide that this is the best option for you. If anything, bankruptcy should only be considered as a last resort. Other options such as negotiating with creditors should be considered before filing for bankruptcy.

If you have come to the point where bankruptcy seems like the only option, it is important to evaluate how it will affect you both now and in the future.

Short-term effects of bankruptcy

1. Your creditors will stop calling

This is one of the best short-term effects of bankruptcy filing. Once you file for bankruptcy, your creditors are required by law to stop communicating with you. Filing for bankruptcy results in your debts being discharged permanently. Creditors of debts that you had incurred prior to filing for bankruptcy can never seek you out to collect on the debts. This includes credit card debts. Creditors will have to go through the official bankruptcy channels to get their money back. Bankruptcy will lift that heavy burden of debt off your shoulders.

2. You’ll get relief from paying unsecured non-priority debts (except student loans)

Non-priority unsecured debts include credit cards, medical bills, most store charge accounts, and payday loans, among others. If you file for bankruptcy under Chapter 13, you will probably end up paying only a fraction of what you owe for these kinds of debts.

Filing for bankruptcy can therefore give you much needed relief when you’re overwhelmed with debt payments.

3. You may be able to keep your car

Filing for bankruptcy will give you several options to address late car loan payments. If you file for bankruptcy under Chapter 13, you may buy time to catch up on your payments and therefore keep your car. You may also be able to renegotiate the terms of your loan and get better terms if your car’s worth is not more than your current loan.

4. You can buy some time to keep your house

If you’re facing foreclosure on your house, bankruptcy filing can help you buy some time. Filing under Chapter 7 will stall the foreclosure process. It may help you to stay in your home for a few more months. Filing under Chapter 13 will allow you to catch up on your mortgage payments. You can therefore avoid foreclosure altogether and keep your home.

5. You could lose some property

Nebraska is amongst the most liberal states when it comes to bankruptcy exemptions. Many of your most important assets such as your home can be exempted from the bankruptcy process. However, you could still lose some property after filing for bankruptcy. The seasoned attorneys at High & Younes LLC will guide you through the bankruptcy process and help you get the best possible outcome.

Long-term effects of filing bankruptcy

1. It will go on your credit history

Bankruptcy doesn’t erase the past. The fact that you filed for bankruptcy will be on your credit history for many years. This can make it harder to obtain new credit, especially in the first year after filing. Creditors will consider you a high-risk borrower. They may deny you credit or give you loans with high interest rates.

2. Your car insurance rates may rise

Bankruptcy filing can affect your car insurance rates. Even though you have fallen on hard times, you may find that your insurance rates will rise instead of drop because insurance companies partly base their rates on the credit history of their customers.

3. You may find it difficult to secure employment in particular industries

Bankruptcy can prevent you from being considered for certain position such as in financial management or law enforcement. Take note that employers must first ask you for permission before they seek your financial information when you apply for a position.

4. You won’t be able to file for bankruptcy again for several years

If you file for bankruptcy, you will have to wait for several years before you will be eligible to file for bankruptcy again. If you end up in debt again, you will have to face the music and pay the debt off or lose your assets.

If you’re considering filing for bankruptcy in Omaha, Nebraska, get in touch with High & Younes LLC and hire an experienced attorney to guide you through the process.

Bankruptcy Attorney Omaha