The bankruptcy stories are seemingly endless and there incredible variations among them too. Some will claim that their life has been nothing short of fantastic since they finalized their bankruptcy, while others will say that it was a colossal mistake to file. Just what is a potential filer supposed to believe? Who will tell you what is going to happen? Why won’t someone just give you a straight answer?

Since no two people are the same (and neither are any two situations), no two bankruptcies can possibly be the same, which is probably the reason why it is such a difficult task to get a straight answer out of anyone who doesn’t have a crystal ball. But having a general idea of how others may deem your bankruptcy will aid you in preparing for the worst, all while hoping for the best.

1. Be Prepared to Explain Yourself. You will be asked your reasons for filing by a number of people, many of whom you may never even have thought of. Be brief, be direct and most importantly, be truthful. Give a reason, not an excuse.  A simple “I got in over my head” will be taken much better than ”This dumb auto dealership…bla bla bla….”, for this will simply sound like a bunch of useless excuses by someone who has no control over oneself.
2. Your Credit History is Not Erased, It’s Zeroed Out. This common misconception can come as an unpleasant surprise to many filers who are in the process of rebuilding their credit and have applied for some type of loan.  When a potential lender pulls a post-bankruptcy filer’s credit history, the excessive late payments are still there, clear as crystal.  The only difference is the balances due are eliminated. This goes back to item number 1 on our list, with the importance of honesty as a key factor in dealing with your filing.
3. Potential Employers may Access Your Credit History. When you interview for a position with a company, the potential employer has every right to ask you to sign a release allowing them to obtain a copy of your credit report.  From this, a prospective future boss may decide to exclude you from the race for this position due to the black marks on your credit reports, even if you have a flawless work history and sparkling references. And it’s all completely legal. 
4. Landlords and Apartment Hunting Could be Tough. Yet another important individual who can ask for access to your credit history is a future landlord.  Again, the best manner to deal with this is with honesty.   

Having a positive plan to rebuild your credit is an essential part of filing for bankruptcy, otherwise you might as well not bother with paying your creditors. At least you will save the legal fees, because your credit is never going to improve simply by filing for bankruptcy.  Now more than ever, a good credit standing is a vital component of American life, affecting more than just your ability to obtain a loan.

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