Will a Consolidation Loan From a Bank Hurt My Credit?

It is a fearful term that gives many people goose bumps. If you think all of these things than you are a good law abiding citizen and you are right in fearing this term. You will be surprised to know number of frauds who hide behind these laws to save themselves and their ill- gotten wealth. Whether to file for bankruptcy or not is a very crucial decision and should not be taken lightly or without keeping all the repercussions in mind.

One of the first things that are going to suffer is your credit rating. Credit ratings are what make you acceptable or unacceptable to the creditors. Do you think creditors put your name in a magic hat to find out whether or not to lend you money? Of course, not they have a scientific method of evaluating each application that come before them before they decide on whether to award you the loan or reject it. A very large part of that evaluation process depends upon your credit ratings. When you file for bankruptcy, your credit ratings take an instantaneous nosedive. Effect on your credit ratings can last from anything like a minimum of 6 years to 10 years. That means that you will not qualify for another loan for at least this period.

rnAnother huge disadvantage of filing for bankruptcy is that you will have to inform your employer that you have filed for bankruptcy. This can have seriously detrimental effect if your job has anything with monetary transaction. Even if it does not, employers do not look at bankrupt people very kindly. In addition, no consultant or lawyer will work for you without an upfront payment. Therefore, in order to file for bankruptcy, you will need to pay the fee of lawyer, court and federal fee also. It also does not exempt you from child support or any back taxes that you may owe the government.

You can benefit from filing for Bankruptcy only and only if you have no other option left open to you. It means that you have no source of income, nothing of value that creditors can seize and auction. There is no way by which you can try to pay of your loans. In short, you have nothing left. Than it makes sense for you to file for the bankruptcy proceedings as it will take the creditors of your back and they will have to write off your loan as bad and no hope of any recovery. That is the way most of the cheats get rid of their debt burdens. Therefore, you should be very careful as every creditor is going to as a crook out to defraud them out of their money.