Oct
12
Bankruptcy: Common Questions and Answers
Filed Under Bankruptcy
Bankruptcy is usually the very last option for people who are in debt up to their ears and can’t find any other way of getting out of debt. Most people are justifiably scared of filing for bankruptcy. There are a few things that should be kept in mind, and a few questions you should find answers for when you look at the implications of filing for bankruptcy. Some of the common fears are justified, while others are just myths.
Contrary to popular belief, bankruptcy does not put you in a rut when it comes to borrowing money from financial institutions. Although the borrowable amount will be limited, you’ll find that many lending institutions are willing to assess your overall situation and loan you the money you need. As it’s a big risk for them, they’ll usually impose higher interest rates. So, even though you might have been misled to believe that you can’t get credit after bankruptcy, it’s simply not true.
Another fear people have is mortgage and home ownership. You might wonder if you can find a lender to give you a loan or approve your mortgage if you file bankruptcy. The answer, again, is yes, you can, but you might need to show a good track record of eighteen months to two years to get this. Contrary to popular belief, lenders do not steer completely clear of people who have ever filed for bankruptcy.
Yet another fear people have is whether their pension savings will be affected. Fact is that most pension plans make sure that when your estate is liquidated to repay your debts, your pension savings are not touched. This means that your pension plans need not be affected at all. The exception, however, is if there are taxes owed that are attached to your pension plan – if so, they will not be exempted.
Before you decide to file for bankruptcy, seek professional help. A professional financial advisor will be able to provide you with relevant information as suitable for your personal situation.
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