While virtually everyone has heard of bankruptcy, the vast majority of people probably have numerous questions about the process and application. One of the most commonly asked questions is, “How will filing for bankruptcy in New Jersey affect my credit?” The answer, not surprisingly, varies from case to case.
Although filing for bankruptcy commonly has a negative impact on a credit rating and FICO score, a person considering filing for bankruptcy in New Jersey must consider the present credit score condition. That is, the majority of people contemplating bankruptcy are in serious financial debt, which probably means that their financial position has already negatively impacted their credit rating. The lower your credit score at the time of the filing, the less of an impact the bankruptcy will effect the score. Also, on a positive note, the lasting impact of bankruptcy is positive, with the discharge marking the beginning of the road to credit score recovery.
The poor state of the economy, together with the country’s present limited money supply, results in difficulty forecasting the future impact of bankruptcy on an individual’s ability to obtain credit. Recently New Jersey mortgage companies have been requiring a debtor to wait about three years to refinance or obtain a new mortgage, after receiving a chapter 7 bankruptcy discharge. Mortgage companies require twelve months of continuous and timely trustee and mortgage payments, as a condition to obtaining refinancing or a new mortgage, in connection with a New Jersey chapter 13 bankruptcy.
Filing for bankruptcy and New Jersey bankruptcy filing costs has an immediate impact on a consumer’s life. Not only will creditors stop contacting you, but they will no longer be able to file suit or take any other legal action against the bankruptcy debtor. Upon the bankruptcy filing, a creditor may not garnish your wages, levy upon your bank accounts, or continue and/or commence a foreclosure action. Furthermore, your home’s utilities cannot be shut off and repossession attempts on your vehicle will be stopped.
While all of the above sounds wonderful given the stress that debt creates, there may be unforeseen negative consequences associated with filing for bankruptcy due an individual’s particular circumstances. That is why any individual considering bankruptcy must seek counsel with an experienced New Jersey bankruptcy attorney.
The skilled New Jersey bankruptcy lawyers at the Law Offices of Robert Manchel will examine your financial situation and help determine whether or not filing for bankruptcy in New Jersey is right for you. For more information, please call us today at 866-503-5655.