You say, hey banker, I have 50k in credit card debt and I am current on all of the payments. You say, because I am current on all of the payments, I am a good credit risk. Seems reasonable right?
Except, here is what banker is thinking; you have 50k in unsecured debt and now you want me to borrow you enough money to pay all of this debt plus give you a little more? Isn’t the banker going to be worried that she might be left holding the bag if you file a bankruptcy?
Now, what would banker say if you wanted banker to lend you money and you had no debt? Banker is now thinking you have no debt, you will be able to make a payment on a loan I give you, and you cannot file a bankruptcy for 8 years (Chapter 7 to Chapter 7). There is a reason why you see people who have filed bankruptcy be able to purchase things. They have no debt, which means lenders are willing to lend to them.
So, the true impact of filing bankruptcy is you are making an unhealthy financial situation, i.e. debt, into a better financial situation, i.e. no debt. People mistakenly think that banks and future lenders just want to know if you are current on your debts. That is not true. Future lenders also want to know do you have debt now, and if so, how much? For future lenders, no debt is better than debt even if you are current on the debt.
When the time is right, or when you are ready, reach out to Minnesota’s NICEST bankruptcy law firm by going now to www.lifebacklaw.com. You will be so glad you did.