How does bankruptcy affect banking?
How does bankruptcy affect banking?
In a friendly tone: When you file for bankruptcy, your creditors have to back off. This means that they can't keep calling you, they can't sue you, and they can't take any action to force you to pay them back. However, it doesn't mean that they stop trying to collect from you altogether. It's important to know how bankruptcy affects banking when you're trying to make the transition from being a debtor to being a creditor—a bank or credit union will want to see certain things in order to be comfortable lending money to someone who has been declared bankrupt.
Filing for bankruptcy
Filing for bankruptcy can be a scary, confusing process. When thinking about how it will affect your financial future, you may be wondering how it will influence the services and accounts that you already have in place. This is a normal concern; after all, filing for bankruptcy is very much an emotional experience. The fact that it may also take a toll on your credit score--and thus your ability to borrow money or take out new credit cards--might even add to the confusion.
Understanding Bankruptcy
In order to better understand what bankruptcy might mean for your banking needs, it's important to first understand what exactly bankruptcy entails. Bankruptcy is a legal process whereby an individual or business can obtain protection from creditors and debt collectors by dividing their assets and liabilities with a court-appointed trustee. For example, if you have $10,000 in assets but $20,000 in liabilities, a court-appointed trustee could give half of what you own to each of your creditors: $5,000 to one creditor and $5,000 to another.
If you have any questions, you can get a free consultation with the Best Attorneys in Utah.
Ascent Law LLC:
8833 South Redwood RoadSuite C
West Jordan, UT 84088
(801) 676-5506
