Making the decision to file for bankruptcy is an important one to weigh. When there are bankruptcy myths floating around, it’s a good idea to learn what good can come from filing for bankruptcy.
If you are currently experiencing the pains of overwhelming debt, take comfort in the fact that in this economy you have company. Everywhere you look businesses are closing their doors, people are losing their leases, families are losing their homes and able bodied men and women are out of work. If you aren’t considering bankruptcy, there is probably someone in your life that is.
Bankruptcy has long carried a negative social stigma, one that is more antiquated and inapplicable compared to how bankruptcy is viewed today. Bankruptcy is not a dirty little word; instead it offers honest individuals a way out of overwhelming debt, a light at the end of the tunnel and a way to have a fresh start.
Most people who are dealing with crushing debt are feeling the stress in many aspects of their lives. Financial problems can wreak havoc on a person’s personal life and it can destroy marriages and ruin families. If bankruptcy can save a few marriages along the way, it is well worth the time and investment.
In a Chapter 7 bankruptcy, certain unsecured debts are discharged or wiped out. These include: medical bills (which can run into the hundreds of thousands), ambulance bills, credit card bills (which can also run into the tens of thousands), old taxes (more than 3 years), utility bills, and personal loans. Can you imagine having these debts wiped out? What cannot be included in a Chapter 7 would be student loans, alimony, child support, victim restitution and court ordered fines.
Once a bankruptcy is discharged, it is entirely possible to rebuild your credit. It doesn’t have to take ten years either. There are some critical steps you can take to start rebuilding your credit as soon as your bankruptcy has been discharged. These include recognizing what circumstances or conditions got you into this situation in the first place and avoiding them.
Other successful actions would entail developing a sound budget and sticking to it, living within your means (don’t spend more than you make), setting aside 10% to 20% of your income each paycheck (for a rainy day), get 3 new credit cards (yes, these are very important to rebuilding your credit score), only charging a very small amount (20% of the balance) and paying them off each month, staying at one home address or job (if you can) because this makes you appear more stable to future lenders, and pay all your bills on time!
Believe it or not, many debtors are in a much better financial position after they file bankruptcy than before. Without that debt looming over their head, they can be far more attractive to future lenders than if they still owed all that money. When you look at the big picture, filing for bankruptcy might allow you to rebuild your credit and get a fresh start within a relatively short period of time. On the other hand, it might take you a great number of years to pay back your debts if you fail to file for bankruptcy.
A seasoned Chicago bankruptcy attorney will be able to review the details of your situation and inform you of all your bankruptcy options or other alternatives to bankruptcy. You owe it to yourself to find out what your options are so you can make a well informed decision about how to handle your situation as it stands.