You’re considering bankruptcy likely because of the benefits you perceive bankruptcy providing to you and your family. You may also be avoiding or delaying your bankruptcy for the perceived negative impact it is going to have on your life.
Good and bad – there will be consequences for filing bankruptcy. Here are 3 ways your life will change after you file your bankruptcy case:
#1 – You Will be Able to Sleep Again
Most of my bankruptcy clients delay filing for bankruptcy for years – even though they need it badly. Month in and month out you have endured the humiliating and harassing phone calls; will you be sued? Will your wages be garnished?
The irony in this whole situation is that debt is exhausting – yet you can’t sleep. Your mind is filled worry. Worried about the present, worried about the future.
Bankruptcy doesn’t eliminate all of your worries. But it will stop the phone calls, stop the worry about wage garnishment, and bring order to the financial chaos you have been enduring for way too long. And the less stress and worry you have, the more sleep you will get. Finally.
#2 – You Won’t Have Any Credit Cards – And That is a Good Thing
Many of the people I help have fallen into the cycle of paying off one credit card with a second credit card – borrowing from Peter to pay Paul. We all know this can’t go on forever.
Bankruptcy stops the cycle by not only eliminating the debt, but eliminating your ability to use the credit cards. I often get asked if it is possible to keep a credit card after filing for bankruptcy.
Even if you don’t owe any money on a card in almost all cases the credit card company is going to cut you off and close the credit account. You will have to learn how to get buy on a cash basis. But this isn’t a bad thing. Being forced to only buy those things that you can pay for now is a good habit to get into and will help you in never having to hire a bankruptcy attorney like me again.
Quick Note – soon after you file for bankruptcy you will get flooded with credit card offers. These will be credit cards with terrible interest rates. I don’t recommend that my clients get any of them. It will be too easy to fall into old habits – only this time you will be paying super high interest rates and won’t have bankruptcy to fall back on; you won’t be able to file another chapter 7 bankruptcy for eight (8) years.
If you must have a credit card I would recommend a secured credit card where you have to put money down as collateral before you will be issued a card. This can be a great way to re-build your credit after bankruptcy.
#3 – You Will Get Back Control of Your Life
When you are in serious debt you lose control. You lose control of your phone. Every time the phone rings you have a physical reaction. You lose control of your bank account. You try to deal with the pressure that the collection agencies are putting on you by agreeing to payment plays where the creditor automatically debits your account each month.
But it never stops. Every day you wake up not knowing what type of payments are going to be taken out of your account and worse if you will have the money to cover it.
When you file for bankruptcy your creditors can no longer take money out of your bank account. They can’t garnish your wages. They can’t even call you on the phone. Think of that – actually answering your phone without fear of who is on the other end.
I never try to sugar coat that bankruptcy can’t solve all your problems and absolutely has consequences when it comes to getting credit in the near future.
However, for many dealing with serious debt problems bankruptcy will not only bring order back to your life – you may not be able to start rebuilding your financial life without it.