Woman happily standing in a field, free from debt.

Life After Bankruptcy: Steps to Building Your Future

Financial burdens and hardships can impact your life and the lives of those close to you. Some people feel this burden more painfully than others. When you have children and a family to support, multiple vehicles, a home in your name, and everyday costs that you need to take care of, the bills that wind up in your lap can seem endless.

Although few options exist to dig out of this financial pit, in nearly all cases filing for bankruptcy is the best option. While many people cringe when they hear or even think of the word BANKRUPTCY, for many it can be a true godsend. Despite the stigma and long hardships that were common with bankruptcy in the past, in the new modern era, a bankruptcy provides far more benefits than in days gone by.

Unfortunately, most debtors are unaware of how truly beneficial a bankruptcy can be to not only their financial wellbeing but also to their mental wellbeing. Many either push off bankruptcy or avoid it altogether, thinking that their financial future will be so negatively impacted that they will never get to a financially stable place that many of us hope for in our lives. In truth, it’s the putting off or avoidance of bankruptcy that keeps debtors bogged down in an endless cycle of “broke”. In the days of banks galore and credit cards aplenty, it is now easier than ever to rebuild credit. In many cases, a debtor can improve his/her credit score by more than 100 points in just 12 short months!

The same kinds of questions and concerns regarding bankruptcy tend to plague the minds of debtors:

“I’ll never be able to buy a house or car again.”

“Will this impact the jobs I can get?”

“How long will it take for life to go back to normal?”

“My credit score will be ruined forever.”

And so on, and so forth. While it is important to think about the aftermath of each financial decision that you make, the truth about bankruptcy is that your financial burdens cease immediately, giving peace of mind, room to breathe, and enough stress relief to finally sleep well. Once you file for bankruptcy and feel immediate stability, you can then take steps to rebuild your future at your own pace. Getting to a place of financial comfort and stability can now be on YOUR terms.

Facing Your Fears

Contrary to popular belief, life after bankruptcy is not the end of your financial future. In fact, the hard part is making the decision. Though many feel a sense of relief once they make this decision, enlisting the help of an experienced bankruptcy attorney is essential to ensuring the process goes smoothly. Bankruptcy is complicated, time-consuming, and usually requires legal strategy for the best results. The last thing you need is more stress trying to tackle something so complex. Let a bankruptcy lawyer do the heavy lifting.

Make a Budget

Bankruptcy can leave you with a fresh start, but fresh starts come with fresh responsibilities. Use this opportunity to rebuild your financial future the right way. In order to do this, create a manageable and realistic budget for yourself. You don’t want to fall into another financial hole, so stop digging and do the work to create a sustainable budget, and only spend money on the things you absolutely need.

Chapter 7 vs. Chapter 13

In most cases, it is better to file for Chapter 7 if you qualify. As a general rule, a Chapter 7 bankruptcy eliminates the debtors’ prior legal obligation to pay back the money owed. There are exceptions, however, and it’s important to know BEFORE you file what can be exempted, what you can keep, and what must be paid back. Consulting with a lawyer can help explain the exceptions and advise you of your most beneficial course of action before filing.

A Chapter 13 bankruptcy, on the other hand, requires the debtor(s) to pay back some or all of the money owed to creditors, but under much more favorable terms. This option is best suited for debtors with high incomes and/or substantial assets. An attorney can help you structure a repayment plan that is in your best interest but still satisfies the court. This allows a debtor to enter a repayment plan, while also keeping his/her assets.

Whether you are making payments toward debt or trying to save up money over time, the important part is to have a budget that you can easily follow and that won’t cause you to go into more debt.

Open Proper Lines of Credit

While bankruptcy can remain on your credit report for up to 10 years, keep in mind that creditors will tend to care more about your current credit score than your past bankruptcy. There is no reason to believe that after filing bankruptcy you should never again open a line of credit. Quite the contrary-establishing new lines of credit is essential to rebuilding “good” credit. Indeed, those who open the appropriate credit lines without incurring more debt will recover much faster from their credit score drop than those who never touch a credit line again. What’s important is to maintain financial wisdom with spending and never buy things on credit you cannot comfortably afford to repay in a short time.

Communicate Honestly

There is a stigma surrounding bankruptcy that stops many people from filing as quickly as they should. For many, it’s a last resort when they are in a financial crisis. They are typically too afraid to let anyone know the true reality of their financial dilemma. No one wants to take on the appearance of a “failure.”

It’s important to understand that this stigma is based on the false understanding that one’s financial future is ruined after bankruptcy. On the contrary, many people who have filed for bankruptcy come out the other end with a much brighter future ahead of them. In addition, the relief from mental anguish, stress, and sleepless nights cannot even be counted in dollars.

If You Believe Bankruptcy Is Right for You

Struggling with debt is tough, especially when you have a family to care for and to support financially. This doesn’t have to leave you without options. In fact, in most cases, bankruptcy is the best decision one can make. If you are contemplating the possibility of filing for bankruptcy, know that you don’t have to be afraid of the future when you have a plan set up and goals to work towards.

Don’t let fear or lack of expertise stop you from making a decision that can turn your life around for the better almost instantly and move you toward a financially-stable future. Call a Richmond bankruptcy lawyer at Throop Law to discuss your options and get you a fresh start!

Contact the bankruptcy attorneys at Throop Law at (804) 215-1515 to make a decision that will help your financial future seem brighter.