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What is bankruptcy's downside?

asked by tsoucia (8)

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Tags:  finance  pros and cons

answers

While bankruptcy is often used as a last resort for people in debt, it has lasting effects on a person's financial life. A bankruptcy stays on a person's credit report for a long time, which in turn lowers their credit score. A low credit score can lead to higher interest rates charged on credit cards, loans, and mortgages.

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posted by triciag (128)
7 votes

The biggest downside is that it stays on your credit for 10 years, but beyond that, you can begin to re-establish credit right away. You just will not be able to get as high a score as you would without it there.

6 votes

The downside of bankruptcy is that it stays with you so long. For years it will keep you from getting credit for anything and if you can get the loan, the interest rate will be quite high.

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posted by Carol37 (506)
3 votes

It becomes almost impossible to get a mortgage. You cannot get a loan without paying 30% or higher interest rates. You are no longer eligible for a money handling job.

3 votes

The downside of bankruptcy is that it will be present on your credit report for the next seven years. This means it will be difficult to obtain loans and credit cards with decent interest rates.

3 votes

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