What about future Credit?
Rebuilding your credit is probably your goal in considering these matters. Every debtor will be different on that, and there is no answer that fits everyone. Certainly if you do nothing you may still have credit problems. Once you are behind on your payments ("in default"), you have a problem called "bad credit", and under the current market for lending, you will pay high interest on less than the best terms. At least if you clear past debts, the next lender will be able to consider that you owe only that debt.
If you reaffirm some debts and successfully pay them off, you improve your credit. But the truth is that your ability to borrow in the future will depend on income and credit factors that go beyond Bankruptcy. It may be harder to get unsecured, signature loans in the future. But people do rebuild their credit and many find available loans for everything from homes to credit cards after Bankruptcy.
The fact is you should probably be most concerned about avoiding a lot of future debt, particularly credit cards and loan companies. The interest rates on these kinds of debt and the way payments are figured make it very difficult to ever pay them off.
Overall, if you are able to pay your debts and live, that is certainly a better alternative than filing Bankruptcy. But if you can't do that, you will not have good credit anyway. Generally, the Credit Reporting Agencies will show your Bankruptcy for 7 to 10 years. But it is not a total bar to future credit.
Do I have to explain what caused my problems?
The Bankruptcy procedure does not require you to explain how you got into a financial bind. That is not part of the process.
In the future, when you seek credit, lenders may ask you about the situation. If you ended up in Bankruptcy because of medical problems or unemployment, it may help them decide whether to make that loan. Generally you are not supposed to be discriminated against solely because you have filed for Bankruptcy, but often creditors want some idea of how you ended up filing for Bankruptcy. If the financial problems were caused by illness, divorce, or other special circumstances, the new loan may be easier to get.
G. Paul Marx, A Professional Law Corporation
NEW LAW- OCTOBER 17, 2005 BANKRUPTCY REFORM ACT
BASICS FRESH START YOUR RIGHTS CREDITORS' RIGHTS WARNING AFTER BANKRUPTCY TAXES LEGAL FEES, COURT COSTS CHAPTER 7 CHAPTER 13
THE U.S. Congress and President Bush have authorized us by law to state that as to our Bankruptcy Work at this Law Firm, WE ARE A DEBT RELIEF AGENCY. WE HELP PEOPLE FILE FOR BANKRUPTCY RELIEF UNDER THE BANKRUPTCY CODE.