Five Terrorizing Things They Don't Tell You About Bankruptcy

Bankruptcy is a terrorizing word and not many want to face this situation. However, given the economic scenario of the present day, many individuals are either filing for bankruptcy or are on the verge of filing.

Bankruptcy is a terrorizing word and not many want to face this situation. However, given the economic scenario of the present day, many individuals are either filing for bankruptcy or are on the verge of filing. Whichever be the case, it is often sensible and necessary to seek the help of professional tax attorneys to get help in this endeavor. This is largely because the entire process of filing for bankruptcy can be quite time consuming and filled with legalese, which can make the individual baulk at the very first step. Moreover, there are several misconceptions with regard to bankruptcy, its filing as well as its impact on the individual. While some attorneys claim that it is the magic wand that the individual requires to set aside all of his or her bad debts, others would argue to the contrary.

Here are some terrorizing facts about bankruptcy that every individual should know:

• Always remains on the credit score: A competent tax lawyer will be able to advise the individual in the right manner as to whether filing for bankruptcy will indeed improve or benefit his or her credit score or not. In most cases, attorneys state and people believe that it will, but the reality is that filing for bankruptcy will always remain present on the individual's credit score. Not only will it remain an irremovable blot on the individual's credit score, but will also make things difficult for him or her in the future, especially with regard to obtaining credit.

• Public Record: Another terrifying fact about bankruptcy is that once an individual files for it, it becomes a public record. In other words, anybody and everybody has access to these records, including the name of the individual and other personal information. This could make life difficult for the individual in the future, given that all potential employers, business partners, banks and other establishments can easily access this information, thereby impacting their decision.

• Impact on past debts: Most people believe that filing for bankruptcy will erase all previous debts, thereby making them absolutely debt-free. However, this is not true and seeking the professional help of good tax attorneys like those at Goldburd McCone LLP will help the individual in understanding the exact impact of filing for bankruptcy to erase past debts. In reality, unsecured debts, including credit card balances, medical bills as well as unpaid taxes on income for over three years will get paid. However, this filing has no impact on any student loan incurred or on any taxes that are payable within the limit period of three years.

• Impact on home loans and credit cards: Here again, there is a great need for a good tax lawyer from a reputed firm like Goldburd McCone LLP, who can throw light on the impact of filing for bankruptcy on the future of getting home loans and credit cards. While many would like to believe that filing for bankruptcy automatically ensures a better credit standing in the eyes of banks and other establishments, it is not true. Home loan institutions refrain from giving loans to people who have filed for bankruptcy and often there is a wait for anywhere between one to four years before they agree to see the application of such an individual. Similarly, credit card companies, over the years, have become smarter and are refusing to issue credit cards to such individuals, merely given the risk of nonpayment and their own incurrence of debt.

• Missing payments under Chapter 13: Bankruptcy can be filed under Chapter 13 and 7. Where an individual files for it under Chapter 13 and misses a payment, the trustee has the authority to convert the filing into one under Chapter 7, where all the assets owned by the individual is liquidated to pay off the debts.

Hiring a professional tax lawyer from Goldburd McCone LLP will not only help the individual learn more about the bankruptcy process and its impact, but will also pave way for other options that can, at times, be more beneficial.