It seems like so many people across the state of Michigan are struggling financially these days. It can feel like a hopeless situation when there isn’t enough money coming in to pay bills that seem to keep piling up. For those who find themselves in this predicament, bankruptcy could be the best option. However, there are some consequences to consider before moving ahead with this important decision.
Credit score
Those considering bankruptcy are likely to see their credit scores have already taken a hit due to nonpayment of debts. However, a bankruptcy can cause credit scores to fall even further. The higher a person’s credit score is, the further it can fall. For example, individuals with a credit score of 700 can expect their credit score to drop 100 to 200 points after a bankruptcy.
Co-signers
A co-signer is a person who signs his or her name to a loan and, by doing so, agrees to pay the debt if the individual receiving the loan fails to pay. In a Chapter 7 bankruptcy, the co-signer is on the hook. Even if a bankruptcy case is successful, creditors can still go after co-signers for payments.
Private life
Those who are considering bankruptcy should know that it is a public affair. Bankruptcies will show on credit reports and the mandatory meetings with creditors are available to the public. In some instances, a bankruptcy could even appear in the legal notices section of local newspapers.
It is important to weigh the pros and cons when it comes to a big decision like filing for bankruptcy. Those in Michigan who are thinking about filing for bankruptcy typically benefit by speaking with a legal representative. A trusted and experienced bankruptcy attorney can answer questions and help individuals determine if bankruptcy is right for them.
