What does a bankruptcy mean for my future?

Bankruptcy may well help Florida residents get out from under large mounds of debt but a good understanding of the future impact is also important.

When faced with debt that seems only to grow and the options to pay that debt down get smaller and smaller, Florida residents may understandable look to bankruptcy for help. Both a Chapter 7 bankruptcy and a Chapter 13 bankruptcy may well provide the debt relief that consumers need to help them get back on their feet.

However, before rushing into the decision to file for bankruptcy, it is important that consumers have a good understanding of the long-term ramifications of this action.

Bankruptcy and job seeking opportunities

Looking for a new job may seem like it should have nothing to do with one’s personal finances but that may not always be the case, especially as background checks have become standard issue in the job hiring process anymore. As CBS News explains, it is generally criminal convictions or other activity that employers are primarily concerned about when running a background check on a potential job candidate.

However, Monster.com notes that these background checks often give employers a look into a person’s credit history or financial situation. For this reason, it is wise for people to be ready to provide details about their situation if asked. A focus on what has been done to get back on track and avoid future problems should be emphasized.

According to Business Insider, employers are not allowed to use a prior bankruptcy as a reason to not hire someone. That said, if a person is applying for a job as a bank teller, accountant or other role in which finances will be involved, a poor credit history may increase an employer’s concern about future potential fraud or embezzlement. Once again, the ability to give details about the bankruptcy and the efforts to regain positive financial footing will be important. Providing positive character references may also help here.

Bankruptcy and new credit

Whether applying for a credit card, a car loan or a mortgage, a consumer must be prepared for a bankruptcy to have an impact on their ability to get credit, at least for a while. As explained by Bankrate, it is often easier for people to get new credit after a bankruptcy that some may think. The road to the best terms may be what takes time. Consumers are urged to start with small steps that help them rebuild good credit histories like getting one credit card, using it for small purchases and paying it off in full each month.

Get information up front

Learning as much as possible about bankruptcy before making the decision to file for Chapter 7 or Chapter 13 is important. For this reason, talking to a lawyer is recommended for Florida residents who believe bankruptcy may be right for them.