At Craft Law Offices our clients are often afraid of filing for bankruptcy because they are worried about the consequences. They have heard so many negative things about bankruptcy and they are confused with what they should do. The truth is bankruptcy may be the only way that they can stop repossessions, foreclosure, calls from creditors and legal action being taken against them.
Filing for bankruptcy may allow for some debts to be erased or possibly lower, more manageable monthly payments. The actual outcome will depend on the client’s overall situation, such as assets, debts, income, and expenses. But bankruptcy could actually help them start to rebuild their life and their credit.
Debt counseling programs do not come close. The best a debt counseling program can do is lower interest rates on your credit cards. If they are promising you more than that, they are not being truthful, and it could be a scam.
We do want to say that bankruptcy is not right for everyone. But when you have tried everything else it could be just the thing to help you get out of debt and back on your feet.
To make the bankruptcy process a little easier to understand, here are four bankruptcy facts we think you should know if you are considering filing for Chapter 7 or Chapter 13 bankruptcy.
Fact 1: You will not lose everything.
Many think that when you file for bankruptcy you have to give up your car, home and other assets. The truth of the matter is that you are likely to keep most of your possessions.
Fact 2: You will have most of your debts relieved.
Both Chapter 7 and 13 provide clients with relief from many forms of debt, but there are some exceptions that will not be relieved. In most situations, you cannot have debts that you are personally responsible for discharged or forgiven. Some examples of this include child support, taxes, and student loans. Normally you will be able to discharge your credit card, medical bill and personal loan debts. If you are considering bankruptcy, contact our office and bankruptcy attorney Leslie Craft can help you understand which debts will and will not be affected with a filing.
Fact 3: You are not a personal failure if you file bankruptcy.
Most people think that if they file for bankruptcy, they are a failure. This is simply not true. Did you know that over 60% of bankruptcies are caused directly by medical expenses? And over the past decade the cost of medical deductibles has grown seven times faster than average wages? What this means is that many bankruptcies are likely the result of wages versus poor fiscal management.
Fact 4: Your financial future is not ruined if you file for bankruptcy.
If you file for bankruptcy, you can anticipate paying higher interest rates and having limited access to credit for the seven to ten years that a bankruptcy appears on your credit report. However, shortly after you file for bankruptcy, your credit score could actually rebound by the time your bankruptcy is finalized.
Plus, there are many ways you can restore your credit after bankruptcy. There will be limitations , but if you make smart financial choices after your bankruptcy is finalized, you will be on the right path for a brighter financial future.
What is next?
We hope we’ve given you a little more information about what will and will not happen in the bankruptcy process. If you are still considering bankruptcy, contact our office and let Leslie Craft answer any other questions you may have.
At the Craft Law Office, no matter what your reason is for considering bankruptcy, we would like you to look at it as a tool that can help you take control of your finances. Bankruptcy is a tool that can help alleviate financial stress and provide you peace of mind.