The past few years have not been easy for many Fort Lauderdale residents. Even with the recession over, countless families in Florida and across the country continue to feel the pinch of tightened wallets, foreclosure and unemployment. If you are one of those considering filing for personal bankruptcy, you might have heard all kinds of horror stories about how this is a terrible decision for your long-term financial welfare.
Fortunately, these opinions could not be more wrong. In decades past, most banks and financial advisors considered Chapter 7 bankruptcy to be a last resort. Bankruptcy had a stigma attached to it that persists to this day, despite many lenders being much more lenient and understanding about the subject. Many people have gone through a bankruptcy and used the experience to not only get back on their feet, but to dramatically improve their credit scores over time. According to Fox Business, there is now a shift in perspective that sees a personal bankruptcy as the second chance it is – a chance to get your head back above water.
It is true that a bankruptcy filing will remain on your credit report for up to 10 years. However, you may find that lenders are willing to give you a chance soon after your discharge. Opening a small line of credit can allow you to gradually raise your credit score. After a bankruptcy, if you continue to pay your bills on time and are smart with your credit decisions, you may qualify for good auto rates in around a year’s time. Within a few years, you might be able to get a home loan.
On the other hand, studies show that many people who avoid bankruptcy experience continued financial distress as they struggle to pay bills that are simply too overwhelming. Does this mean that you should file for bankruptcy right away? Like all major financial decisions, you need to be as informed as possible about your options. Therefore, this information should not replace the advice of a lawyer.