The Christian Broadcasting Network

Who is supposed to take the lead – husband or wifedaveramsey_md.jpg

More Dave Ramsey articles

You can see all of Dave’s columns at www.davesays.org

Personal Finance

Spending

Dave Says: Bankruptcy Aftershocks

By Dave Ramsey


CBN.com – These days it pays to be smart about money. That's why it's important to take this wise counsel from financial expert Dave Ramsey.


Dear Dave,

What are the long-term effects of declaring bankruptcy?

Brittany

Dear Brittany,

One of the biggest aftershocks of filing bankruptcy is that it stays on your credit report for years afterward. A Chapter 7 filing, which wipes out everything and gives you a clean slate, stays on your report for 10 years. Chapter 13, which is a repayments plan, and Chapter 11, another type of large bankruptcy or business bankruptcy, both stay on your credit bureau report for seven years.

Another big problem is that it can follow you around when it comes to applications or when you apply for different types of licenses. Many of these ask if you’ve ever filed bankruptcy. It doesn’t ask if it’s still on your credit report; it will ask if you’ve ever filed bankruptcy. If you have, you’ll have instances for the rest of your life when you have to admit it and explain it all over again. So, it’s an emotional scar that follows you around for a long, long time.

Too many bankruptcy filers never really recover from their financial distress because they never learn new and better ways to manage their money. That’s why I recommend people do everything they can to avoid bankruptcy. It’s not an easy do-over; it’s a last-resort kind of thing. And in the vast majority of situations it’s just not necessary.

—Dave
 
 

Log in or create an account to post a comment.  



CBN IS HERE FOR YOU!
Are you seeking answers in life? Are you hurting?
Are you facing a difficult situation?

A caring friend will be there to pray with you in your time of need.