Is There Life after Chapter 7?

For many of our clients, filing for bankruptcy is a momentous decision. Many consumers have spent years struggling with mammoth debt loads because they dreaded filing for bankruptcy protection.

Many of these fears are overblown, as our clients soon find out. Yes, there is life after bankruptcy. But there will also be changes, and we do not want to minimize them. As experienced South Florida bankruptcy attorneys, we encourage all our clients to spend some time thinking about how they will adjust to the changes.

Prepare to Discuss Why You Filed

A Chapter 7 bankruptcy will stay on your credit report for 10 years after you file. This might seem like a long time, but chances are it will rarely come up. Although bankruptcy is public, few people are digging through background checks to find out if you have had financial difficulties.

Nevertheless, there are two situations where those who file find themselves having to discuss their bankruptcy: when they apply for a job or when they apply for an apartment. A boss/landlord will consider you a risk because of the bankruptcy, so you need to spend some time thinking of how you will address it.

One approach is honesty. If you got into debt because of job loss or a medical crisis, many employers will understand. Make sure to point out how you are rebuilding your credit and taking charge of your financial situation post-bankruptcy.

What happens if you went bankrupt because you enjoyed one too many all-expenses-paid trips to Vegas? In this situation, you might want to say something general like, “I’ve made some financial mistakes in the past” and then transition to what you have learned.

Begin Rebuilding Your Credit

It is simply false that you’ll need to wait 10 years before you can get a credit card again or secure a mortgage or car loan. True, you will probably need to wait some time. But there is plenty you can do to begin rebuilding your credit.

For one, you can get a secured credit card and start using it sensibly. This means never charging too much and paying the balance off in full each month. Some people have found that within a year or two, they can get an unsecured credit card from a bank.

For another, you should set up a budget that you can stick with. This budget should allow you to pay all your bills every month while also putting something away for retirement or an emergency fund. You might need to dramatically reduce your expenses, but you will gain peace of mind in the process. You also will reduce the chances of getting into financial difficulty again.

By paying all bills and spending sensibly, you can get your credit score back up fairly quickly. After a few years, the negative pull of your bankruptcy filing will lessen.

Contact Nowack & Olson for More Information

At Nowack & Olson, PLLC, we are always happy to discuss whether filing for Chapter 7 protection is the right step for you. To schedule a time, please call our Plantation bankruptcy lawyers at 888-813-4737.

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