Hiring A Bankruptcy Attorney For Peace Of Mind
What Is Life Like After Bankruptcy?
Gabriel Freeman
One of the biggest fears that keep folks from filing for bankruptcy is the concern that the process could be life-altering. Any attorney at any bankruptcy law firm will tell you that the goal of the process is to get back to living a normal existence and not to wreck you financially. Clients need to understand what life will be like on the backside of bankruptcy so let's take a look.
Access to Credit
No lawyer can guarantee what your level of access to credit will be like. Broadly speaking, though, potential creditors tend to see someone getting their debts under control as a good thing.
Chapter 7 bankruptcies, which involving liquidating non-essential assets, stay on your credit record for 10 years. A Chapter 13 filing will stay on the record for 7 years. The clock starts from the date that you file, not when you complete the process.
Presuming you don't accumulate more problem debts, your credit should eventually improve. As you might imagine, the removal of the bankruptcy mark on your credit record will serve to improve your credit. Once your score improves, you should be able to manage your credit rating and access to loans largely like before.
Credit Score Shifts
Research on the topic indicates that folks with good credit who file bankruptcy can expect to lose between 130 and 240 points from their FICO scores. People with the highest FICO scores usually lose the most points. If your FICO score is close to cratered, you can expect to lose fewer points.
Retaining Assets
How much you retain in the way of assets depends largely on two factors. First, the type of bankruptcy you file is a big deal. Folks who successfully file for Chapter 13 should be able to restructure their debts and hold onto all of their assets.
Those filing for Chapter 7, on the other hand, will be at the mercy of their states' laws. Many states allow people to retain assets up to a certain total value, but you'll have to apply for exemptions for the assets you wish to retain. Likewise, you should retain all essential assets, such as the car you drive to work and any non-luxury clothes you own. Also, you might hold onto assets that the court-appointed trustee doesn't consider worth selling.
Some folks mix Chapter 7 and 13 filings to retain their homes. You'll have to file for Chapter 7 first and liquidate your non-secured debts. Then you may be able to file for Chapter 13 to restructure the mortgage.
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Hello, my name is Kiley, and if you have major debts and you're thinking about filing for bankruptcy, this is the blog you need to read. Two years ago I was very much in debt, and then I was laid off from my job. The only alternative I had was to file bankruptcy. I was very nervous about filing bankruptcy until I spoke with a bankruptcy attorney. The attorney explained the bankruptcy process with me in terms that I could understand. After the consultation, I felt much better. If you're considering filing bankruptcy, this blog explains the process so you'll know what to expect. I wanted to write this blog so that I could help other people who are in the same situation and to let them know how the process works.