What happens to your finances after bankruptcy?

| Nov 30, 2020 | Bankruptcy Law |

You’ve come to the conclusion that you need to file for bankruptcy as a means of getting your finances back on track. However, if you don’t consider the impact it will have on your future, as well as the steps you can take to protect yourself, you could soon find yourself in trouble once again.

No two people have the exact same financial circumstances. For that reason, the approach that you take to bankruptcy and life after bankruptcy will be unique.

Here are some things you need to know about your finances post-bankruptcy:

  • Your bankruptcy filing will remain on your credit report: A Chapter 7 bankruptcy remains on your credit report for 10 years, with a Chapter 13 bankruptcy remaining in place for seven years. That being said, there are steps you can take to boost your credit score shortly after bankruptcy, such as regularly using a secured credit card for purchases.
  • You have a new financial life: For example, if you file for Chapter 7 bankruptcy, you’ll get a fresh start. And if you file for Chapter 13 bankruptcy, you’ll have a repayment plan that allows you to make good with some or all of your creditors. Either way, you’re putting yourself on the path to a new financial future.
  • The future is yours: Yes, the initial impact of bankruptcy is sure to cause you financial stress. But now that you’ve taken this step, you’re in position to control your destiny. You can create a budget that suits your life. You can avoid the mistakes that plagued you in the past. You can set financial goals that allow you to live the life you’ve been dreaming of. There’s nothing standing in your way.

It’s critical to understand what happens to your finances after bankruptcy. Not only does this allow you to decide if you should file, but it puts you in position to create a plan for the future.

If bankruptcy is on your radar, learn more about both Chapter 7 and Chapter 13. Doing so will position you to make the right decision.

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