While there are many benefits to declaring bankruptcy, bankruptcy should always be considered a last resort. Those considering bankruptcy should keep in mind the

disadvantages of filing for bankruptcy.

PROS AND CONS OF FILING FOR

BANKRUPTCY

Part 2: Cons of Filing for Bankruptcy

Part 2 The Cons of Filing for Bankruptcy

After you file for bankruptcy, you will lose all credit cards if they are not paid off before you file. In many cases, you can apply for new credit cards within 24 months, but you will probably have to pay high interest rates and annual fees.

You Lose All Credit Cards

The damage a bankruptcy has on your credit depends on how bad your credit was before you filed. Those with good credit will see a bigger drop than those whose credit is already poor. Bankruptcy will stay on your credit report for 10 years.

Your Credit is Damaged

Certain debts, like student loans, back child support payments, some tax debts, and government fines and penalties may not be eligible to be eliminated in a bankruptcy. Debts incurred through fraud or debts from court judgements in wrongful death or injury lawsuits are also not dischargeable.

Not All Debts Can Be Discharged

Depending on the type of mortgage you are looking for and the type of bankruptcy you filed for, you may have to wait to one to four years after the bankruptcy is discharged to obtain a mortgage loan.

No New Home Mortgage

Court documents relating to bankruptcy are public record and can be viewed by anyone in the federal government’s electronic records. It is also possible that your name could appear in a local newspaper if the paper reports on public notices.

Bankruptcy is Public Record

"Pros and Cons of filing For Bankruptcy." The Law Office of Areya Holder. Holder Law, 10 September 2010. Web. 1 July 2015. <http://www.holderlawpc.com/blog/pros-and-cons-of-filing-for-bankruptcy/index.html>

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