Life After Bankruptcy FAQ
Many people are anxious to know what their life will be like after bankruptcy. While every case is different, you should know that bankruptcy is designed to give filers a fresh financial start. Millions of people have filed, and many found the process allowed them to get back to living the life they wanted.
What happens to my credit after filing?
It’s true that filing bankruptcy is one of many factors that affect your credit rating. However, your credit rating may already be struggling if you are receiving calls from creditors or facing foreclosure.
Credit scores are complicated, but bankruptcy won’t permanently destroy your rating, although in the short term you may have difficulty acquiring large credit lines without a co-signer. While bankruptcy will remain on your report for up to 10 years, filing may also give you a unique opportunity to start re-building your credit.
In fact, many people who file bankruptcy are able to get their credit score higher than ever after their case.
Because bankruptcy is designed to wipe out multiple debts at once, you may suddenly find yourself in a better position to manage your regular monthly bills. Paying phone and utility bills on time will improve your credit score. With your finances back under control, you may be in a better position to avoid costly fees, penalties and high interest rates.
Over time, with a little work, you may be able to get your credit back to where you want it.
Will I be able to buy a car or house again?
Buying homes and cars may depend on the work you do to repair your credit. While it takes some work and time, it’s an achievable goal for many people, and they go on to own homes, cars, boats and more after their filing.
You may have the most difficulty getting a loan for these purchases immediately after your filing. But over time, the affect the filing has on your credit score will lessen, and you may have more options. Purchasing a new car may be very achievable, as many dealers have special payment plans or lending options for people with all types of credit.
Plus, with your finances under control, you may be in a better position to save up the money needed to pay for a new car in cash.
Will my life be different after filing?
Bankruptcy is designed to be a fresh financial start. What you make of this opportunity is up to you.
At first, you may feel a sense of relief as the creditor harassment and some stresses slip away. With some of your bills completely wiped out, you may have more financial freedom to start saving, investing and living the life you want.
Filing doesn’t mean you have to give up the things you care about. Each year, hundreds of thousands of people file – even celebrities! These people are able to get on with their lives, and you should be able to do the same.