Rebuilding Your Life After Bankruptcy
Bankruptcy allows you to rebuild financially without the burden of much of your existing debt. You can potentially eliminate most of your debt by filing under Chapter 7, or you can reorganize your debt under Chapter 13. Filing for bankruptcy is not without its consequences, however. You should consider the changes you will need to make in order to stay on track financially. At Anidjar & Levine, our Hollywood bankruptcy lawyers can help you decide if rebuilding your life through bankruptcy is the right choice for you. Give us a call today to learn more.Making a Fresh Start Through Bankruptcy
Bankruptcy can offer you the chance to make a clean financial start. Most individuals will file for bankruptcy under either Chapter 7 or Chapter 13 of the Bankruptcy Code. Chapter 7 provides a relatively quick way to eliminate most of your debt. An impartial bankruptcy trustee will collect your non-exempt assets, liquidate them, and pay your creditors with the proceeds from the sale. At the end of the proceeding, a bankruptcy court will discharge any remaining unsecured debt. The process takes only a few months to complete, but you must be eligible to file under Chapter 7. Otherwise, you may have to file for bankruptcy under Chapter 13.
With Chapter 13 bankruptcy, you partially pay back your debts. You enter a repayment plan and make monthly payments, over the course of three or five years, to a trustee. This person will in turn pay your creditors. The monthly payment amounts are tied to your income. After you complete the plan, a court will grant a bankruptcy discharge for any remaining dischargeable debt.
Both Chapter 7 and Chapter 13 provide a way for you to wipe your slate clean of debt, but they also have other detrimental consequences. A bankruptcy discharge will negatively affect your credit, so you must take steps to rebuild it. Generally, Chapter 13 is viewed more favorably than Chapter 7 because you were at least partially able to pay back your creditors. However, your credit score will drop because of the bankruptcy itself, and you will have to slowly rebuild your credit. The bankruptcy will stay on your credit record for up to 10 years.
It may take some time for you to get a loan after a bankruptcy discharge. For example, you must wait at least two years after a Chapter 7 discharge to qualify for an FHA loan, although there are exceptions for individuals who filed for bankruptcy after a serious illness or another condition outside of their control.Rebuilding Your Credit
Although bankruptcy has a detrimental impact on your credit, you can take steps to restore your creditworthiness. You will have to make changes to your lifestyle and rebuild your credit over time.
To rebuild your credit, you can:
- Undergo credit counseling . Credit counseling and debtor education are requirements for bankruptcy. A credit counselor can help you pay your debts on time and show you how to live within your means during and after bankruptcy.
- Obtain a secured credit card. With a secured credit card, you deposit cash into an account, and the cash acts as both collateral and the credit line for the card.
- Make timely payments on your non-dischargeable debts . These are debts that you cannot eliminate in bankruptcy. Student loans and child support are some examples of non-dischargeable debts.
- Review your credit report at least once a year to ensure it is accurate and free of any errors.
As you emerge from bankruptcy, you can take these and other measures to avoid accumulating debt beyond what you can afford. Bankruptcy may not be for everyone, but for some people it can be the opportunity they need to eliminate or minimize burdensome debt and restart financially.Providing Dedicated Guidance on Fort Lauderdale Bankruptcy Matters
If you are considering filing for bankruptcy in the Fort Lauderdale area, the bankruptcy lawyers at Anidjar & Levine can help you. We can knowledgeably answer your bankruptcy-related questions and discuss whether filing for bankruptcy can give you a new financial start. We offer client-focused representation to help you achieve your goals during and after bankruptcy. For a confidential consultation at no cost to you, please call us at (800) 747-FREE. You can also complete our online form to schedule a free consultation.