These days, the average citizens are often dependent on too much credit in order to get by. With this fact, many people are reduced to declaring bankruptcy so as not to push themselves into further financial troubles. On the other hand, the cost of bankruptcy can be so much more than what is obvious.
Furthermore, bankruptcy is not simply about the filing for bankruptcy cost or other fees that you have to disburse to your bankruptcy lawyer, but it is really about the long-term serious damaging impacts of bankruptcy on your life. And so, before you take steps and proceed to file for bankruptcy in an effort to dispose of the debts that you have with different creditors, it’s extremely important for you to become aware of the effects that bankruptcy will have on your financial life for the next 5 to 10 years.
Then again, if you know the negative effects and you’re prepared to face it, then you can proceed and file for bankruptcy. At any rate, let’s have a look at what bankruptcy will cost you or the expenses that you should expect when you have decided to go on with the filing.
1. Filing cost
In the preceding years, when numerous additional bankruptcy laws have been integrated in the bankruptcy code, the cost of filing for bankruptcy had increased considerably, from a few dollars, 4 years ago, to hundreds of dollars today.
2. The fees of the bankruptcy lawyer
When it is about bankruptcy cost, the biggest part of the over-all cost is composed of the attorney’s fees. Usually, the rates of bankruptcy lawyers are quite high. For that reason, you must carry out a comprehensive research and a little investigation to ascertain if you will be able to pay your lawyer. If not, there may be a need for you to search for ways so you can afford to pay for the attorney’s fee.
3. You will not be eligible for loans for the following 10 years after your declaration
Once you have declared bankruptcy, you will not be able to obtain any kind of loan or credit for the next 10 years. And even if you succeed with obtaining one, you will suffer from higher interest rates because lenders consider bankrupt individuals to be a risky venture.
4. Excessive insurance premiums
If you are bankrupt and you have an insurance policy, your monthly premiums will be so much higher.
Nevertheless, you will have to triumph over a lengthy conflict before you can finally start rebuilding your credit record. One good way to improve your credit score is to get any kind of loan and never be late in paying your dues. In the following years, when you have repaid your loans, you will definitely improve your credit standing.
From there, when everything is working fine, you can avail of another loan and your interest rates will be much lower this time. On the whole, when you are still on the stage of planning to file for bankruptcy, be sure that you know very well what you are getting into and what it will cost you.