Filing for Chapter 7 bankruptcy is a big decision that can affect you and your financial future. That’s why it’s important to fully consider whether it’s the right option for you. It’s also helpful to work with a bankruptcy law firm that works exclusively in this ever-changing area of law. We can help you understand what filing for bankruptcy means for your personalized situation. At Dantzman & Dantzman, we understand that financial troubles can be very stressful for you and your family, and we take time to listen and formulate a plan that will effectively help you get back on track. Our goal is to help you achieve a fresh financial start so you can begin moving forward debt and worry-free.
Read on to learn more about how filing for Chapter 7 bankruptcy can help you in the long run.
Chapter 7 Bankruptcy Discharges All Unsecured Debts
The undeniable upside to filing for Chapter 7 bankruptcy is that it can lift a major burden off your shoulders in as little as 3 to 5 months. Individuals, self-employed workers, small business owners, and corporations may all file for Chapter 7 bankruptcy.
It wipes out most types of debt, including credit card debt, medical bills, personal loans, and most other types of general unsecured debt. Your obligation to pay these types of unsecured debt is permanently eliminated when the bankruptcy court grants your Discharge of Debts. This is so that you have peace of mind knowing that the debts are truly forgiven – forever. Relief in Chapter 7 is available to you, regardless of how much money you owe, so there isn’t a minimum or maximum debt limit, under Chapter 7, that disqualifies you.
You Can Keep Most Assets
The vast majority of chapter 7 cases are “no asset” cases, meaning you keep all of your property and are still eligible to discharge your debts. That’s because the law protects most property – by way of “exemptions”, which we will use to protect and shield your property and assets from your creditors. In most cases, you can keep all of your assets such as your vehicle, home, and household goods and furnishings. Most retirement plans are also fully protected. So before you think about draining those retirement funds to pay your debts, make sure to at least set up a consultation to discuss all your options. However, if you have assets that are non-exempt (not legally protected), then you may need to proceed under a Chapter 13 bankruptcy, where assets cannot be sold. However, you have to pay back some of your debt. Even in the vast majority of chapter 13 cases, debt is still able to be paid back at pennies on the dollar, with the balances being forgiven at the end of the repayment plan.
Steps You Can Take to Improve Your Situation in the Long Run
It’s important to remain patient as you prepare for life after bankruptcy. Depending on where your credit score is, you may see an initial bump in your credit score. In fact, we find that most of our clients have experienced a higher credit score one year after filing Chapter 7 than on the day that they began the bankruptcy process.
However, if your credit score is already high, which is sometimes the case, then your score will likely experience a dip and it will be important to start rebuilding your score as soon as you are able. It will be important to use this opportunity to get your finances that survived the bankruptcy, such as car loans or mortgages that you have been reaffirmed on back on track, and demonstrate that you can manage your money. Additionally, if you had student loans or certain taxes that survived the bankruptcy, you would want to immediately establish affordable repayment plans for these. Lastly, applying for new credit, such as a new credit card or car loan are effective immediate ways to get positive ratings back on your credit reports. Over time, you will find yourself in a much better position than you were before you filed. But these are just a few essential tips to keep in mind.
Also, be sure to check your credit score and credit reports about 3-6 months after the completion of the bankruptcy. Not only will this show the progress you’re hopefully making, but it will allow you to be proactive should any potential issues arrive. It will also benefit you to pay all future bills on time, especially on cars, houses, and other real estate that you may have kept during the bankruptcy process. Keep track of when your bills are due and if possible, make payments in advance to avoid making late payments.
Finally, establish a budget and stick to it. This will give you better control over your expenses and help you save more money.
Need Help Filing for Chapter 7 Bankruptcy?
We recognize that the decision to file for Chapter 7 bankruptcy can be a difficult one, and you shouldn’t go about it alone. Talking to an attorney that specializes in bankruptcy can help you discover hidden dangers and avoid mistakes, and makes sure to maximize the benefits of filing bankruptcy for you in the long term. Dantzman & Dantzman Law Office provides quality, competent, personal bankruptcy attorney representation. Our law firm takes pride in being accessible to clients to answer any difficult questions they may have. We will remain by your side throughout the bankruptcy process – from start to finish.
Contact us today to discuss your options and for an immediate in-person or virtual consultation about your case.