Unsecured Debt

• If you file for bankruptcy, you might be able to get rid of all unsecured debts. This can wipe the slate clean for your debts. You will receive a discharge of debtors notice from the court.
  
  

Credit Report/Score

• A bankruptcy can reduce your credit score significantly. You might not be able to get new credit for quite awhile. Some bad credit loan lenders will approve you with high interest rates and fees. This information will stay on your credit report for seven years.
  
  

Sheriff's Sale

• If your home is foreclosed on, it will be sold to the highest bidder at a sheriff's auction. You might be responsible for the deficiency balance.
  
  

Foreclosure

• A foreclosure will decrease your credit score by approximately 280 points and remain on your credit file for seven years.
  
  

Mortgage Payments

• If you file bankruptcy and your home is in foreclosure, you will have to make your mortgage payments, if you can afford them, or surrender the home to the lender. It will then foreclose on the property.
  
  

Reaffirmation Agreement

• When you file for bankruptcy, if you have a car loan, you must sign a reaffirmation agreement if you want to keep the car. A reaffirmation reinstates your original contract and allows you to make monthly payments.