Life After Bankruptcy

Rebuilding Your Credit After Bankruptcy

Many people refrain from filing for bankruptcy protection because they have misconceptions about life after bankruptcy, or simply do not know what disadvantages there may be. Your creditors may be the source of some of these misconceptions – some of the debts you owe  will be discharged when you file. It is time to separate fact from fiction. Not all Salt Lake City bankruptcy attorneys are the same. Some are only concerned with helping clients find temporary debt relief solutions. A good attorney looks at the big picture. One of the biggest challenges many people face is rebuilding their credit.

In fact, there is very little “downside.”

Depending on the type of bankruptcy, many of your debts, particularly unsecured debts, will simply be discharged. Life will also be free of threatening letters, harassing phone calls, interest payments, late fees and penalties, worry and embarrassment. The first step is to seek representation from a Salt Lake City bankruptcy attorney with a track record for helping clients navigate through the process to accomplish their goals.

Credit After Bankruptcy

Far too many people make the incorrect assumption that filing for bankruptcy is sign of failure. Nothing could be further from the truth. Having the right bankruptcy attorney on your side can make a big difference. One of the biggest misconceptions concerns credit.  Rather than being seen by new creditors as a poor credit risk, you now have a lower debt-to-income ratio. You are seen as being proactive in handling your finances. And since you cannot file for bankruptcy in Salt Lake City again for several years, new creditors know that even their unsecured loans to you will not be discharged during that time.

When it comes to filing for bankruptcy, it is important to exercise some patience. Your credit rating will go down initially, but rebuilding your credit will not take long. The filing will appear on your credit report for seven years (Chapter 13) or 10 years (Chapter 7). But the fact is, you will soon be getting credit card offers in the mail. It’s just that the terms will not be ideal. The interest rate will be higher, for example.

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CHAPTER 13 BANKRUPTCY

CHAPTER 13 BANKRUPTCY INVOLVES THE REPAYMENT OF DEBT OVER A THREE TO FIVE YEAR PERIOD ACCORDING TO A COURT APPROVED REPAYMENT PLAN.

Along with a bankruptcy petition and supporting documentation, people filing for Chapter 13 bankruptcy will also need to include a preliminary repayment plan which is usually developed during credit counseling. After the creditors meeting you will attend a meeting to confirm your repayment plan. Once your repayment plan has been successfully completed, you will receive a discharge of your debts.

CHAPTER 7 BANKRUPTCY

Before your bankruptcy petition is filed, you will need to take a means test to see if you qualify for Chapter 7 bankruptcy

A The means test measures your disposable income against that of other Utah citizens and ensures that your application for bankruptcy is not an abuse of the system.

After the creditors meeting has been completed, the trustee will identify your exempt property and your nonexempt property. Your nonexempt property may be sold at auction and the funds used to repay your creditors. If your trustee decides that none of your property can be sold, you would lose nothing.

After the funds, if any, have been distributed to your creditors, you will receive a discharge and will no longer have any personal responsibility for those debts.

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It can be easy for even the most responsible person to fall into overwhelming debt. But does not have to be impossible to get out. The first step is to seek representation from a Salt Lake City bankruptcy attorney with a track record of protecting the rights of clients and looking out for their best interests. Contact our office today to discuss your bankruptcy questions with a lawyer. We are available during regular business hours and by appointment evenings and weekends. You can reach us by phone at 801-505-9679 or via e-mail.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.