There are many challenging decisions in life such as whether to go to college, move for a job, have children, or retire. These decisions can be life-altering and forever change your financial future. When debt takes over, life can become overwhelming and even worrisome. You may not know what to do or if things can ever return to normal. Even if it seems like a drastic and desperate move, filing for bankruptcy is not only a reliable option, it is also often the best step to take in order to obtain a fresh financial start.
Many individuals facing overwhelming debt question what the process entails. They also wonder how the process will impact them overall and how soon they can have their finances back in order. For those filing for a Chapter 7 bankruptcy, it is common to be concerned about what the future will look like when the process is complete.
Whatever the reason you have for filing for Chapter 7, it is important to understand how it can address your debt situation. While it can wipe out most forms of debt, it should be noted that it doesn't unload all of it. For example, Chapter 7 does not allow for discharge of student loans. It also cannot remove delinquencies from your credit report. It should be noted that a bankruptcy filing can remain on a credit report for 10 years.
Despite the fact that the bankruptcy process can impact a person's financial future for 10 years, this should not deter him or her from using this method to obtain debt relief. The impact reduces over time, and a filer can take immediate steps to begin rebuilding their credit. What is important at this time is to be mindful of all monthly expenses and to pay every bill on time. One way to help rebuild credit is by using a secured credit card. This type of card required the holder to put cash into an account as collateral. Putting just one reoccurring purchase on the card each month can be very helpful with regard to rebuilding credit.
Life after bankruptcy might seem grim or confusing at first, but this alone should not prevent individuals and families from using the bankruptcy process to address debt problems. In fact, it can be a viable option resulting in a much improved financial position, especially if a person is faced with foreclosure or repossession. Thus, those facing insurmountable debt may want to discuss the matter with an experienced bankruptcy attorney who can help ensure protection for one's financial future
Source: Yahoo Finance, "Life after Chapter 7 bankruptcy," May 15, 2017