As the bills start piling up, you have begun to consider your options. Bankruptcy sounds somewhat appealing, but you are worried about your credit. Are there any advantages to filing for bankruptcy?
Of course, this article is merely an overview. Only a lawyer in your area can appropriately advise you on the legalities and benefits of bankruptcy for your personal financial situation in your district.
Consumers often get into debt for a number of reasons. You may have had a job loss, medical bills, or other circumstances beyond your control. Possibly, you are right along side of many Americans who have simply spent money beyond their means. The situation really does not matter.
The fact is that you are over your head in debt. You need some relief. You know you owe the debt, and you have probably tried to make the payments to the best of your ability, but you just can’t seem to tread water. When you feel that you are swimming against the tide, it is time to seek legal counsel.
Filing for bankruptcy is not as unpleasant an experience as you may expect. As one who has been there and done that, I was expecting to be treated negatively. When it was about time to file, I pictured myself walking out of the lawyer’s office with my head hung down in shame. The experience was nothing like I had imagined.
The process of filing was rather easy and uneventful. I anticipated trouble with the new bankruptcy laws in effect, but this was not the case. After speaking with the lawyer about our rights and responsibilities associated with bankruptcy, my husband and I decided to file. The feeling we felt was not of shame, but of relief. For the first time in years, we had just enough breathing room in our finances to survive. The greatest benefit of bankruptcy is the relief of the financial burden from your shoulders.
So many people are concerned about the bad mark left on their credit after filing for bankruptcy. Typically, by the time you have reached the point of filing for bankruptcy, your credit history has already been marred. It will take seven years to get the high credit card balances and late payments off of your credit history. This does not look good to anyone wanting to lend you money. Of course, bankruptcy is not a positive on your credit history report, but it does give you the chance to start fresh.
Filing for bankruptcy gave my family a chance to learn how to budget better. Knowing that we could not rely on credit cards to bail us out was a huge factor in our success. Although a change in jobs and medical bills contributed to our debt, we also needed to improve on our financial skills. In our area, we were required to take a short class on budgeting. Some of the information in the couple hours of the class was very basic and obvious. Certain pieces of information was very valuable. I would recommend the class for anyone wanting to improve the budget in their home.
Do you hate getting calls from creditors harassing you about your debt? After filing for bankruptcy, these calls will stop. You will no longer need to screen calls with your answering machine. You will not receive nasty letters in the mail reminding you that you owe life and limb to a particular company. Even though you may try to brush off these calls and notices, you will be surprised how much stress you will lose when these contacts from creditors stop.
Right at one year after filing for bankruptcy, my husband and I were offered credit cards. Yes, the cards had a small annual fee. The amount of the credit line was less than $1000. It is probably best to avoid several credit cards if they were a factor in your decision to file for bankruptcy, but alternatively, one credit card with a small limit and reasonable annual fee can allow you to begin to rebuild your positive credit history. For example, I accepted a card with a $300 credit limit and a $60 annual fee. I chose not to activate the card for months. This gave me time to pay off the annual fee without racking up a balance on the card. I divided the payment into four equal amounts and now have established some credit history that proves I pay on time.
Consulting with a loan officer, my family was told that a bank will look more favorably on a bankruptcy filing than they would on someone who came in with credit counseling debt consolidation on their credit history report. The reason? The bank knows that you can withdraw from credit counseling debt consolidation at any time. Also, it is known that you cannot refile for bankruptcy for several years. Although this sounds odd, this fact gives the bank a slight feeling of security when it comes to loaning money.
Filing for bankruptcy is not for everyone in all financial situations, but there can be many benefits to filing. Consult with a lawyer and find out how filing for bankruptcy can improve your life. You will have less stress and possibly more money to live on for daily expenses. Don’t give in to the stigma attached to bankruptcy without looking into all of your options.
