Life After Bankruptcy - LA County Lawyers
Bankruptcy often represents a significant change in the way of life for any individual. Oftentimes, people worry that filing for bankruptcy will result in long-lasting negative repercussions. In reality, most individuals will find that life after bankruptcy is less stressful, more productive, and provides several opportunities for an improved financial future. Each type of bankruptcy has its own advantages, and depending upon your circumstances, you will likely benefit from one type of bankruptcy over another.
Reorganization bankruptcies, such as Chapter 13 bankruptcy, give you the chance to establish solid financial discipline. By making your payments on time, you can also take advantage of any tax benefits you may have, such as payment of interest on a mortgage. Potential creditors look closely at your repayment habits after your bankruptcy is discharged, so by remaining disciplined from the very start, your credit will gradually improve.
Liquidation bankruptcy, or Chapter 7, can also be helpful - by reducing the amount of unsecured debt, you are free from those high interest rates that credit cards so often charge. This directly relates to an increase in your savings potential, as you are no longer paying 15%-20% interest on your purchases. This can make you more financially solvent, and better able to handle your remaining debts as well.
One of the main pitfalls to avoid in the period directly after bankruptcy are the pre-approved credit offers that often arrive after your bankruptcy has been discharged. These offers typically have the lowest credit limits, along with the highest fees and interest rates - a combination that can spell disaster for your financial stability. Many times, these cards have credit limits as low as $500 dollars, and fees that when added together, total nearly the full amount of the credit limit itself. Avoid high-risk credit cards, and instead focus on rebuilding your finances.
While life after bankruptcy can be a challenge, living without credit during that time is not impossible. If your debts have been discharged, you will be free of the endless cycle of minimum payments, and you'll be able to save for those things that are important to you. Whether you're saving for retirement, a college fund, or even a vacation, the money you put aside today will be there when you need it most.
If you have concerns about what your life will be like after bankruptcy, talk to us. One of our experiencedLos Angeles County Bankruptcy Lawyers will speak with you one-on-one in a free initial case evaluation that can help you see the benefits that bankruptcy has to offer. Don't delay - the sooner you take action to eliminate the overwhelming debt in your life, the more options you will have for regaining your financial freedom.