What Are the Consequences of Filing Bankruptcy in Dublin, Ohio?

Millions of Americans struggle with overwhelming debt, including those in the Dublin, Ohio area. For many, it’s no fault of their own, but various circumstances combined can lead to this situation. When all other options to alleviate debt have been exhausted, bankruptcy is a final option. These are the consequences of filing.

Decrease in Your Credit Score

After a bankruptcy filing, you can expect your credit score to decrease. Chapter 13 remains on your credit report for seven years while Chapter 7 bankruptcy can stay on your report for up to 10 years. Although the dip in your credit score may be significant, you can take time to gradually rebuild your credit and your score will improve over time.

Less Access to New Credit

Filing for bankruptcy means that you will have less access to new credit. You may qualify for certain loans, but they will have higher interest rates. You may also have trouble securing a mortgage after your filing, which means you must wait to buy a new home. This can be anywhere from one year if you filed for Chapter 13 bankruptcy to two years if you filed Chapter 7.

No Tax Refund

If you receive a tax refund after bankruptcy, you may have to use it to pay off federal taxes. This is especially true with Chapter 7 as a bankruptcy trustee is assigned to oversee your case; your tax refund may be used to pay back certain debts.

You May Lose Assets

With Chapter 7 bankruptcy, one of the consequences you must face is that you may lose some assets. However, most people who file Chapter 7 have little to no assets; still, it’s possible to lose some property as it’s normal for nonexempt assets to be liquidated so that your creditors can be repaid. Chapter 13 bankruptcy allows you to keep your assets, but only if you make regular payments as required by your repayment plan. If you default, you are at risk of losing assets.

Some Debts Aren’t Forgiven

Some people have a misconception that all debts are discharged after filing bankruptcy. This is false; some are still your responsibility to repay. This includes unpaid alimony or child support payments, some housing fees, unpaid federal taxes, money owed toward retirement plans and debts that go unreported when filing bankruptcy. In many cases, student loan debt may not be forgiven, either.

It Goes on Public Record

Bankruptcy filings are public record, which means that anyone can see that you filed for Chapter 7 or Chapter 13 while in debt. Although it might be difficult to see the public filing- as bankruptcy filings are in federal court. However, any standard background check will show the bankruptcy.

If you have sizable debt and find it difficult to pay back your creditors, it’s a good idea to determine your options. An attorney can help you keep your assets in bankruptcy and explain which debts are able to be discharged.