Sometimes it feels like everyone, their brother, their third cousin and their stepmom’s boyfriend’s dog are checking out your credit report. On those days, bankruptcy can become a very touchy subject and may even touch parts of your life that never suspected it would come near. You could call it the side effects of declaring bankruptcy.
Possible side effects include, but are not limited to: insurance rates, schooling choices, workplace drama, privacy issues, etc.
It’s true. Insurance companies have been known to use credit as one of their factors included in their pricing policies. There have been instances when Chapter 13 filers have been told to pull their kids out of private schools and put them in public schools (although there have also been cases when religious beliefs were grounds to continue paying private school expenses). Until someone learns to control basic human nature, privacy is a potential issue as bankruptcy records are public information, employers often have signed documents in employee files (that you may not even remember signing) that give them permission to pull credit reports on employees, and if your Chapter 13 payments are taken out via payroll, at least one person in your office will be aware of your personal financial situation.
If you fear the potential side effects, take action. If you have a compelling reason for filing bankruptcy (a.k.a. divorce, business failure or medical bills, chronic sickness in a child, etc.) list it on your credit report. You are allowed to make a notation (100 words or less). It has no effect on your credit score, but when your report is accessed for curiosity sake you’ll have your say. And when it’s accessed for certain professional purposes such as employment or insurance, etc. there could be a judgment call being made and your notation could make a big difference. Also of note is the fact that you can increase your privacy by having your paycheck directly deposited and arranging for an immediate bank withdrawal on the same day of the deposit that will avoid getting your office’s payroll department involved in your Chapter 13 payments.
But most importantly, remember the reality of the phrase “side effect.” When’s the last time you took some Tylenol or gave some to one of your kids? The potential side effects of Tylenol sound pretty intense and disturbing. Have you read them lately? Since you probably haven’t, here’s a refresher. Potential side effects of Tylenol include, but are not limited to: low fever, nausea, stomach pain, loss of appetite, jaundice, and many, many more that you can easily find on the bottle or online if you are looking for the long list. (I didn’t include the harsher or more descriptive side effects of the common headache medicine here as my point is not to turn your stomach). My point is that side effects are possible, not probable. We take the Tylenol (and give it to our kids) because we KNOW it will get rid of our headache, and while we’ve HEARD of the side effects, we don’t know anyone who has actually suffered them.
Don’t block yourself from obtaining a discharge from debt that is threatening to drown you completely because you fear a few potential side effects that could happen if you file for bankruptcy. Focus on what WILL happen and prepare for the “could happens” as much as possible. You’ll find that filing for bankruptcy, receiving a discharge of your debts and getting that fresh start is worth a little bit of potential lost appetite.
If you need to discuss the potential side effects of declaring bankruptcy in comparison to the benefits of receiving that discharge of debts, get in touch with Westgate Law today.