Bankruptcy has a bad rap. It’s true. Working in bankruptcy, we see so many of the harsh realities our clients are facing each day. Outside the bankruptcy circle (including bankruptcy attorneys, financial advisors and even the courts), bankruptcy has a bad image. “Bankruptcy is great for people who rack up enormous debt and then can’t pay it off,” people think. The truth couldn’t be further from that perception.
So what does a bankruptcy look like and who are typical filers?
Let’s clarify the biggest misconception first. Bankruptcy filers don’t fall into a typical stereotype. From young adults who have made terrible financial mistakes with credit cards, to families that have hit hard financial times from a layoff or a serious illness, to senior citizens who struggle with sudden financial restrictions of a fixed income and skyrocketing medical bills; there is no one typical case. Financial hardship is undiscriminating and devastating.
By the time many of our clients walk through our door, they are distraught, exhausted and terrified. Many believe that they have no future, financial or otherwise.
What bankruptcy offers is a second chance. The protections provided in both chapter 7 and chapter 13 bankruptcy enable our clients to step back, take a look at what can be fixed, and sometimes clear the financial slate to rebuild their financial reputations and credit worthiness once again.
- Bankruptcy can provide a fresh start.
- Bankruptcy protection can help you save your home from foreclosure.
- Bankruptcy often allows you to keep all of your property.
- After bankruptcy, it is often possible to rebuild your credit within just two short years. I’ve had several clients buy homes within two years of filing for bankruptcy.
- Bankruptcy isn’t as ‘public’ an event as you think. In fact, most people will never know that you filed or completed a bankruptcy, unless you tell them.
While filing for bankruptcy protection should never be taken lightly, it is a viable option when the situation becomes otherwise unresolvable.