There are many reasons people may need to file for Bankruptcy in Cedar Rapids. The top five reasons are medical expenses, job loss, poor financial decisions with credit cards, divorce or separation, and unexpected expenses. Lack of finances are the number one reason for divorce. If people are going into a divorce due to money struggles, filing bankruptcy is usually not far behind. It makes sense that with the unemployment rate increasing, bankruptcy numbers and divorce rates increase as well. Many people file without knowing how it will impact their lives.
Filing bankruptcy does a number on a persons credit. It will be nearly impossible to get a mortgage loan for five to seven years from the time they file. Bankruptcy in Cedar Rapids stays on one’s credit for about ten years, making it difficult to get credit cards, buy a home, get a car loan, acquire credit and sometimes get a job. Many people come into bankruptcy thinking that all their debt will be forgiven, but that is not always the case. Bankruptcy does not discharge student loans, back taxes or child support.
The two types of personal Bankruptcy in Cedar Rapids are Chapter 7 and Chapter 13.
Chapter 13 is used if a person has a large amount of equity in their property that they want to keep. By filing Chapter 13, they can keep their property while following a court approved payment plan for three to five years. This payment plan will give them a sufficient amount of time to catch up on financial obligations. Some lenders look further than just your credit score when lending money, and a Chapter 13 tends to look better than a Chapter 7 because some or all of the debt will be paid.
Chapter 7 would be filed if there is not a lot of equity in their property and they are not able to meet basic expenses. One of the biggest pros to filing Chapter 7 is that most of the unsecured debts get discharged.
When thinking about filing for Bankruptcy in Cedar Rapids, be sure to contact a bankruptcy attorney. By doing so, you can get all the information on how this will impact your life for the next ten years.