Getting a divorce can be a frustrating situation to handle. When it’s combined with excessive debt, it makes it even worse. Knowing what to do if you’re in Southern California with this predicament will likely take some research. After finalizing the end of your marriage, one direction you might want to take is to file bankruptcy. Doing so can give you the fresh start you need to restart your life.
What does filing bankruptcy entail?
Have you been left with excessive debt after getting a divorce? Making credit card or loan payments and putting food on the table simultaneously can be challenging. If you’re in this position, you may want to file bankruptcy. This action forgives the debts you’re having trouble paying and offers creditors a way to obtain some measure of repayment based on your current assets. Three choices are available:
– Chapter 7: Eliminates your debt
– Chapter 11: Offers business restructuring
– Chapter 13: Gives you a debt repayment plan
It should be noted, you can’t include student loans in bankruptcy in most cases.
Making the decision to file bankruptcy
While filing bankruptcy can eliminate your debt, there is a negative side. Doing so will be indicated on your credit report for ten years. However, it will drop off eventually, and it gives you a chance to start fresh without an overbearing number of payments.
Immediately after you file bankruptcy, your credit scores will likely plummet. However, the good news is that it probably won’t stay this way forever. Once those debts are wiped out, your scores should move higher as they won’t be listed on your credit report.
Weighing the pros and cons is essential if you are thinking about filing bankruptcy after getting divorced. In the short term, your credit scores will be damaged, but in the future, you won’t be overwhelmed financially and can move on with your life.