Sometimes, personal debt becomes so unmanageable that filing for bankruptcy can bring real relief.
Going bankrupt can keep you from losing your home, your car, having your paycheck garnished, or having your utilities shut off.
But according to Business Insider, bankruptcy is no walk in the park and has long-lasting consequences on your credit record.
With Chapter 7 bankruptcy, all eligible debts are discharged immediately. It will stay on your credit report for up to ten years.
In Chapter 13 bankruptcy, you agree to a three- to five-year repayment plan to partially or fully repay your debts.
It can stay on your credit report for up to seven years. In either case, you will need to hire an attorney, which can be expensive.
To rebuild credit, keep making on-time payments towards any debts not included in the bankruptcy. Also, consider getting a secured credit card.