LEGAL GUIDE
Written by attorney Kenneth Lee Sheppard Jr.

What to Expect After Declaring Bankruptcy

Filing for bankruptcy may seem like a last resort and for many people it is. Life after bankruptcy can be more appealing and less stressful than if you never filed in the first place.

Is your phone ringing off the hook? Are you receiving threatening letters in the mail from debt collectors? Have you had to borrow money to pay your mortgage, rent or basic necessities? If you can answer yes to any of these questions then you are probably experiencing financial turmoil.

Financial troubles can cause a substantial amount of stress for individuals and families. In this day and age nearly everybody’s lives have been touched by the poor economy. Whether your property value tanked in the real estate collapse, if someone you know lost their job or if your favorite local café went bankrupt, you’ve probably been affected by the economy in some way or another.

Hard times can make people do things they wouldn’t normally do. An educated father can take a second job working for minimum wage, while a stay at home mom rejoins the workforce. For some families adjusting to their weaker economic status means selling or losing their second vehicle, while others have to move from a three bedroom home to a small apartment. People generally do what they need to do to get by but sometimes doing their best just isn’t enough.

There will always be those individuals and families that no matter what they do or how hard they work, they still have difficulty getting by. Perhaps mom or dad is having trouble getting a job or perhaps their mortgage rates have ballooned and they can’t qualify for a refinance because there isn’t enough equity in the house. Either way, these people deserve help. Nobody should have to go around in life struggling with debt that they can never repay. Bad things happen to good people all the time and debt overload is more common nowadays than it has been in decades.

People in situations like these should consider filing for bankruptcy. A Chapter 7 bankruptcy is ideal for people with a low income or for the unemployed. Through a Chapter 7, many if not most unsecured debts such as credit card debts, medical bills and personal loans can be wiped out.

For those individuals with a good steady source of income, they too might find relief from bankruptcy. Although they might earn too much money for a Chapter 7 bankruptcy, they can still consider filing a Chapter 13 bankruptcy. This bankruptcy allows them to reorganize their debts and pay them off in three to five years. If they have a home in foreclosure, it can save their home and protect the home from being lost though the foreclosure process.

Whichever bankruptcy a person files, they might experience a great sense of relief once their bankruptcy petition is filed. If you choose to file bankruptcy there are a few particular benefits that you will notice right away; for example, once the automatic stay is in place, you won’t hear from your creditors any longer. This will give you some breathing room and a much needed sense of relief.

With both bankruptcies, you can take comfort in the fact that you are addressing the problem as opposed to ignoring it or letting it get out of hand. Those interest charges and late penalty fees don’t go away on their own. They keep adding up each and every month, making your overall debt load larger by the minute.

Do you think you will ever catch up? Is it realistic that you will be able to earn enough money to pay off all of your debts within a few short years? If the answer is no to either question, it’s probably time to start weighing your bankruptcy options. An experienced bankruptcy attorney will be able to guide you through the process so you can make the right decision.

Once your Chapter 7 or Chapter 13 bankruptcy is discharged you can start rebuilding your credit! In many cases people can rebuild their credit much faster after filing bankruptcy than if they chose to continue chipping away at thousands of dollars in debt. What might take a decade to repay if you don’t file bankruptcy might be solved in a much shorter period of time if you do. To find out if bankruptcy is a sensible solution to your financial troubles, contact a bankruptcy lawyer today!

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