Bankruptcy Attorney Tips for Getting a Fresh Financial Start

Understanding Your Bankruptcy Options and Which One Fits Your Life

Filing for bankruptcy feels like admitting defeat to a lot of people but a bankruptcy attorney will tell you it is actually a legal tool designed to give honest people a second chance when debt has spiraled out of control and there is no realistic way to pay it all back in a reasonable timeframe. The two main types of consumer bankruptcy that a bankruptcy attorney handles are Chapter 7 and Chapter 13 and they work completely differently so understanding which one fits your situation is the first step toward making a smart decision about your financial future. Chapter 7 is what most people think of when they hear bankruptcy because it wipes out unsecured debts like credit card balances medical bills and personal loan bad credit obligations in about three to six months and a bankruptcy attorney will help you figure out if you qualify based on the means test which compares your income to the median in your state. Chapter 13 is more of a reorganization where you keep your assets but pay back a portion of your debts over three to five years through a court approved payment plan and a bankruptcy attorney often recommends this route for people who are behind on their mortgage and want to stop foreclosure or who make too much money to pass the Chapter 7 means test. A bankruptcy attorney will also explain what debts cannot be discharged in bankruptcy including most student loans recent tax debt and child support or alimony obligations so you have realistic expectations about what filing will and will not accomplish. The automatic stay is one of the most powerful benefits that a bankruptcy attorney can get you because the moment your case is filed all collection calls lawsuits wage garnishments and foreclosure proceedings have to stop immediately giving you breathing room to figure out your next move.

How a Bankruptcy Attorney Helps Rebuild Credit After Discharge

The fresh start after bankruptcy is not just about wiping out debt it is about rebuilding your financial life and a bankruptcy attorney can guide you through the steps to get your credit back on track faster than most people think is possible. A bankruptcy attorney will tell you that secured credit cards are one of the best tools for rebuilding credit after discharge because they report to all three credit bureaus and as long as you pay the balance in full every month you start building a positive payment history without paying a dime in interest. After your bankruptcy discharge you will start getting bombarded with credit card offers and car loan offers and a bankruptcy attorney can help you sort through which ones are actually decent and which ones are predatory garbage with insane interest rates and fees that will just put you right back in the same mess. A bankruptcy attorney might also recommend working with credit repair services to make sure your credit reports accurately reflect the discharge and that none of the discharged debts are still showing up as active delinquencies dragging down your score. If you need a car after bankruptcy a bankruptcy attorney can advise you on how to get an auto insurance quote and financing without getting taken advantage of by dealerships that prey on people with recent bankruptcies. And a bankruptcy attorney will connect the dots between your bankruptcy and other financial goals like getting a life insurance quote while you are still young enough to lock in a good rate or working with tax relief help services to deal with any tax debt help issues that survived the bankruptcy discharge and still need to be addressed separately.