People often hesitate to file for bankruptcy because they’re afraid that it’s possibly the worst way out of a bad financial situation.
If this sounds like you, you’d be right to some degree, because if you file bankruptcy, it’ll stay on your credit report for 10 years. This sounds like a financial death sentence, but not necessarily. You’ll still be able to get credit, it will just affect your credit score.
One of the most common questions about bankruptcy is about your current credit cards, and your credit for buying a home or any other big purchase.
If you owe on a current credit card, and you file bankruptcy, that credit card debt must be listed in your bankruptcy forms as a debt. These forms are filed under penalty of perjury, and if you’re not completely honest, your bankruptcy case can be rejected.
Perjury is a federal crime. You could end up with hefty fines or in prison if you falsify any of the documents that you submit in your bankruptcy case. As for your credit cards, if you don’t owe the company anything, you don’t have to list it.
But this doesn’t necessarily mean you’ll get to keep your credit card. The issuing card company might decide to cancel your account as a precautionary measure.
You’ll also need to keep in mind that credit is available to people who file bankruptcy, but you end up paying much higher interest rates.
It’s not necessarily a good idea to start applying for credit cards right after filing bankruptcy. This is what usually gets people into trouble. Beware of credit repair scams as well. The old adage is as true with credit as it is anywhere else in life; “If it sounds too good to be true…”
The assumption that you won’t be able to get a loan for a home in the ten years after filing bankruptcy is a false one.
Usually after a couple of years you should be able to qualify for a loan. Your bankruptcy will stay on your credit report for 10 years , but it’s simply taken into consideration and you can usually be given a loan regardless.