When people in Connecticut overextend themselves financially, bankruptcy may often seem like the easy answer. While bankruptcy may very well be the only answer in some instances, there is a lot more to the process and aftereffect of filing than many people consider. So, before making the decision to file for bankruptcy, it is a good idea to prepare for the repercussions that come with the benefits.
For example, Forbes points out that bankruptcy is not free. There are often legal fees associated with filing for bankruptcy. And, even if a person knows the process well enough to file on their own, there is one financial repercussion that is unavoidable. Their credit will suffer a 10-year mark and it may take some time for it to recover.
It is also important to note that bankruptcy does not clear all balances. Here are some of the debts that may remain even after filing for bankruptcy:
- Child support
- Student loans
- Real estate liens
- Some luxury items
People who never have cause to even consider filing for bankruptcy may view those who do as financially irresponsible. However, as CNBC explains, medical debt accounts for two-thirds of bankruptcy filings. Many Americans may believe health insurance will protect them from this reality, but because of inadequate insurance, this is not always the case.
Filing for bankruptcy is not a decision that should be taken lightly. It is always best to consider other options before making the decision to file. The good news is that at the end of a day, even a 10-year scar on your credit score fades with time.