JUST a mention of the word “bankruptcy” is enough to scare some people to death.
Their minds are immediately filled with horror pictures of creditors taking away their home, business, savings, retirement plans and everything that they have worked so hard for.
They imagine themselves hiding in shame from everyone or being put in a situation where they have to explain themselves. What will their family and friends think once they find out about the bankruptcy filing?
The good news is that all these fears are completely unfounded.
First of all, although your bankruptcy filing is public record, no one but your creditors and your attorney will know about your bankruptcy filing unless someone deliberately searches court records to find out about you. But who will do that?
Secondly, almost 100 percent of my clients who file for bankruptcy lose nothing and keep everything. No, creditors will not go to your house to take what you own. As a matter of fact, the purpose of filing bankruptcy is usually to protect what you have will applying for debt relief from the court at the same time.
I think that the loss of property and assets is what people fear most when filing bankruptcy. But as I stated above, most Chapter 7 cases are no asset cases. And if you are filing for Chapter 13 debt consolidation, no assets are ever taken and sold in that type of bankruptcy.
The other usual concern is whether they will be able to get credit again. First of all, most people in debt no longer have good credit. They either owe too much that no one will loan them a penny or their credit has already suffered because of late payments.
But even if your credit is outstanding at the moment, yes, filing bankruptcy can stay on your record for 7-10 years depending on what type of bankruptcy you file (10 years for a Chapter 7 and 7 years for a Chapter 13 — both from the date of filing). However, with a Chapter 7, it normally only takes about three years to rebuild credit.
Why? Because after three years, you will have zero debt and your bankruptcy will be a few years old. Potential creditors will not care as much as what happened three years ago as they would if the negative information was recent.
I have seen clients file Chapter 7 and purchase a home just three years later. It is possible if you understand the steps needed to do it. With a Chapter 13, the bankruptcy stays on your record for seven years from the date of filing so if you were in a regular five-year repayment plan, it will automatically be erased just two years after you pay off your plan.
I am not saying that bankruptcy is for everyone. But if it is your only option, do not lose hope because it is not the end of the world. You can look at the next few years after bankruptcy in a more positive way by telling yourself that it is exactly what you need to rebuild your finances again.
To schedule a free consultation, please call Toll-Free 1-866-477-7772. We have offices in Glendale, Cerritos and Valencia.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped thousands of clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1 (866) 477-7772.