What are the Downsides of Filing Bankruptcy?

  1. Bankruptcy filings are reported to the three credit bureaus. A Chapter 7 bankruptcy will remain on your credit report for 10 years, and a Chapter 13 stays for 7 years.

          You can; however, re-establish a good credit score much sooner than that.  Usually, you can achieve a good credit score within a couple of years  after filing bankruptcy.  Many of our clients have been able to secure a bank mortgage to purchase a home as soon as 2 years after filing bankruptcy.

  1. Bankruptcy filings are public information. In some areas a local newspaper lists the names of people who have filed for bankruptcy protection.

Although they have in the past, for the past several years the local newspaper in Binghamton, NY has not listed bankruptcy filings.

  1. Bankruptcy costs money. There is a filing fee that must be paid to the Court, a fee for a credit counseling course and debtor education course, and the legal fee charged by your attorney.  Attorneys typically base their fees on the difficulty of the case and the amount of time it will take to file and manage your case.  Chapter 13 bankruptcy is typically more expensive than a Chapter 7 because it often lasts 3-5 years, and requires more time and legal work.

Often, the amount needed to pay the bankruptcy attorney before filing a Chapter 13 is not more than is needed to pay the attorney for a Chapter 7.  The additional amount is usually paid to the attorney through the Chapter 13 Plan by the Chapter 13 Trustee. The first appointment is always free, no matter the circumstances. We offer flexible payment arrangements for future payments; however, all payments must be received prior to filing for a Chapter 7 bankruptcy.

Please contact us to discuss any questions or concerns you may have. Orville & McDonald Law is here to serve you.