Bankruptcy acts as the safety net, which protects the people from falling under massive debts. However, everyone struggling financially wants to know whether bankruptcy just trades one form of pain to another or actually provides the much-needed sigh of relief.
Debtors want to know every terms, procedures, and benefit regarding the filing of bankruptcy. One of the most common questions asked to a Denver bankruptcy attorney is what happens after filing the bankruptcy? Well, this is a weighted question and how things will emerge after bankruptcy actually depends on the individual case.
Here are some of the important things that happen after bankruptcy:
Riddance from creditor
The fresh beginning of your financial life starts when the court notifies the creditors about the discharge order that you have received wiping out all your qualifying debts. These creditors will not be able to sue you, garnish your wages, append your bank account, or take you to court in any way, putting an end to on-going garnishment.
Moreover, the creditors can’t pester you any more to pay the balance bills through phone or emails and they can’t keep hitting your credit reports. Protection from creditors begins as soon as the bankruptcy case is filed.
However, be aware, as it is not unusual for the creditor to attempt collection of debt that was forgiven by bankruptcy. If they somehow inadvertently manage to bother you, keep your paperwork handy. They are likely to stop calling, once you give the case and discharge details, but if the badgering still persists then just notify your attorney.
There is no denying that the credit score will hit after filing bankruptcy, which will affect your financial life, as the credit report will tell your employees, creditors, insurance people, and landlords about your financial position, they could use this information to determine whether to work with you or not.
However, the ugly history can remain up to ten years on credit score, but you are entitled to show that now you owe nothing, and the impact will lessen with time. After you receive the discharge order, review your credit report minutely to make sure everything is reported correctly showing closed accounts and zero balances.
After the bankruptcy, your credit score is likely to decrease but not necessarily, credit card offers will start raining soon after the discharge papers, within a year or two, you will be able to purchase a car on improved credit terms. Moreover, the chances of renting or leasing the house will increase after two years from a professionally managed company, mostly within four years of bankruptcy people qualify for a mortgage, even sooner if there was not any foreclosure involved and the bankruptcy resulted from unavoidable situations like divorce or illness.
Further, it is advised by Denver bankruptcy attorney to sign up for a secured credit account or two that will report positively to your credit post filing of the case and help you build up the scores.
You won’t be having much of the financial obligations after the bankruptcy, therefore you can use the extra money to build up your future. One of the main criteria of the bankruptcy process is your budget. So, develop a basic budget that takes care of your expenses and reviews it every week to keep a check and review where you stand.
In addition, you can start saving for the emergency fund for the unexpected medical expenses or the roof leakage or other unforeseeable emergencies. Once you have your budget under control and that fund starts to grow you can always plan for the retirement contributions by paying yourself.
Saving money is an important lesson to be learned from bankruptcy as it will help you avoid the new debt. It will also assist you in avoiding incurring unplanned debt that has the habit of growing uncontrollably
Bankruptcy is a chance to bring back your life on track, so you should take advantage of the opportunity it entails. Moreover, you’ll be amazed to see that how well you’ve handled everything, after getting a fresh start.