Tag Archives: bankruptcy

How to Recover From Bankruptcy

Millions of individuals have filed for bankruptcy since its inception. This may come as a shock to many people who generally view bankruptcy as a state in which irresponsible individuals find themselves. Although bankruptcy occurs when someone is unable to pay their debts, there are a variety of circumstances and decisions which can bring about this unfortunate situation.

According to Investopedia, medical expenses, employment loss, excessive spending/misuse of credit cards, marital divorce, unforeseen financial emergencies, and more expenses than revenue are some of the most common factors which have prompted bankruptcy. In the best case scenarios, people would proactively take steps to avoid digging themselves into this hole, but the best scenario is not always the one which ends up playing out.

Thankfully, there is still hope and various ways in which people can recover and otherwise break free of the bondage that is bankruptcy.

Pinpoint Your Financial Habits Which Prompted Bankruptcy

Many great minds have stated that those who fail to learn from history and past mistakes are doomed to repeat them. This is especially applicable to financial habits and money-related decisions. As a matter of fact, U.S. News recommends people to evaluate their financial choices and pinpoint exactly what led them into bankruptcy. Someone who went bankrupt because of debts should actively seek out additional revenue streams. An individual who experienced bankruptcy due to an unforeseen emergency should be sure to habitually put aside funds in the event of unexpected expenses. Failure to prepare is, in essence, preparation for failure.

Make Payments with Cash or Debit ONLY

So many cases of bankruptcy can be traced back to people living way above their means and constantly swiping credit cards for things that they can’t afford. This type of reckless spending is extremely problematic and will certainly kill any potential for forthcoming financial gain and security. Therefore, making payments exclusively with cash or debit not only prevents excessive credit card use, but cash and debit payments furthermore motivate the individual to earn the necessary funds to cover their expenses.

Credit cards can be beneficial if the person exercises discipline and self-control. As a matter of fact, many companies have advised individuals who are recovering from bankruptcy to use credit cards. However, a person who still lacks the control to not swipe, swipe, swipe the card at every turn will probably do well to simply make cash or debit payments. After gaining some financial security and acumen, one can then look into applying for a credit card.

Relinquish Self Blame

Although taking responsibility for one’s actions is paramount, so is not falling into the trap of negative self-talk. Bankruptcy is not fun, nor is it an easy state to be in; therefore, many people can eventually begin to feel perpetually discouraged. This feeling will not change bankruptcy, however, excessive self-blame does have the potential to distract from steps that the individual could take as they work to improve their financial health.

Remember…getting knocked down happens to all of us, but the decision to stay down is entirely different. There is always room for self-improvement. It all begins with you.

 

Authored by Gabrielle Seunagal

Surviving Bankruptcy: Everything You Need to Know

Educate yourself and plan to avoid making the same mistakes again

 You might feel some relief once you file bankruptcy and your debts are consolidated into that one monthly payment, but do you realize how long this stays on your credit report? While the slate is clean, you still must deal with the crushing blow on your character. Not only can this impact your ability to buy what you want, it can hurt your chances of employment too. However, sometimes Chapter 7 is the only way Canadian families can get on their feet again. If you proceed wisely it can help you, but if not—this could be a big mistake. Let’s look at some steps that will ensure filing bankruptcy will get your debt to income ration in a balance. It’s important to understand what you can and cannot do when you take a step like this.

What You Can and Cannot Do When Filing Bankruptcy

Bankruptcy law

Understanding what debts bankruptcy will do away with and which will still be required for you to pay is extremely important. So, let’s be clear here. Not all debt is erased when you file bankruptcy.  Unfortunately, there are some creditors who can attempt to influence the court not to place a specific debt under bankruptcy protection. While it doesn’t seem fair, it happens more often than not. When you file for bankruptcy (whether Chapter 7 or Chapter 13) your debts are consolidated and separated into categories. Some debts will receive priority over others, and these happen to be the ones that can cause the most problems for those in debt. However, if you are hoping to get rid of medical debt and not be plagued by it—this is removed.

Medical bills are classified as unsecured debts, much like credit card debt. When you file bankruptcy they are gone forever and you can begin recovering from that overwhelming stress and anxiety you’ve been under. However, something such as an automobile loan is not as simple. This can still be repossessed if the loan company pursues it in court. Mortgages can be saved and no one can take your home when you file bankruptcy! Let’s learn how you can avoid ever filing bankruptcy again and getting your life stable and on track.

Don’t File Multiple Bankruptcies: Not Good for the Long-Term

bankruptcy-attorney-bakersfield-ca

You really don’t want to have to go back and ever file another bankruptcy again, not after the first one. So, it is critical to understand what you’re getting into and what is going to happen. Too many are in the dark concerning what Chapter 13 does and what it really covers. To make it easy, filing bankruptcy can be a powerful option used correctly. It can:

  • Removes credit card debt and other unsecured debt
  • Eliminates very specific lien agreements
  • Stops collection activity and prevents harassing phone calls

But Bankruptcy cannot:

  • Secured creditors can repossess property, even with a bankruptcy in place
  • Bankruptcy cannot remove child support payments or alimony
  • Can’t eliminate most tax debt, but some is possible
  • Traffic tickets and other fines cannot be eliminated

While bankruptcy can help with a great deal make sure you’re filing it for the right reasons.  More importantly, make certain the debt you have can be taken care of when you file bankruptcy.  Know what it can and can’t do!