There is often a lot of emotion attached to how and when we spend money. For instance, we spend when we are happy and often also indulge in retail therapy when we are bored or sad.
While mismanagement of money is sometimes the reason for our financial downfall, more often it is due to an unexpected life event like a major illness, car accident, loss of job, or divorce.
If your bills exceed your income, you have little in savings, and virtually no way to pay your creditors, bankruptcy might be your best option. With the help of a skilled bankruptcy firm like Levitt & Slafkes, P.C., you can explore your options and determine if Chapter 7 or Chapter 13 is better for you.
Although one of these options may be a good fit, you may have anxiety about moving forward.
The following are three of the most common fears and worries people have about filing bankruptcy:
1. Worry about inability to make large purchases in the future
Damage to your credit may be weighing heavily on your mind as you consider filing for bankruptcy. You may be concerned that you will never be able to buy another home, or the car of your choice. That’s not true, although it might be a while before you are able to do so. If you do decide to buy a home, you may be able to get a mortgage within a few years. This of course assumes that your finances and payment history are in good shape after bankruptcy, which shows a lender that you are a good risk despite bankruptcy. It is also likely that you will be able to purchase a vehicle shortly after your bankruptcy is over. In this case, however, the interest rate might be on the higher side.
2. Fear of losing your current home, car, and other property
Contrary to what many believe, you should be able to keep your home and your car in a Chapter 7 or a Chapter 13 bankruptcy.
There could be complications, however, if you are behind on your mortgage or car payment, or in the middle of foreclosure proceedings or repossession. While the automatic stay (an injunction that goes into effect as soon you file) will stop all collection activities for the duration of the bankruptcy, a mortgage or car lender can petition to have it removed if you are behind on payments. We can help you understand all of these scenarios so that you are able to make the best decision for you.
Keep in mind that in a Chapter 13 bankruptcy, past due payments can usually be included in the Bankruptcy Plan. This will let you keep your home and car as long as you can stay current on the payments. See more about keeping your property in bankruptcy here.
3. Social stigma
Although thousands of individuals file for bankruptcy every year, and probably some of them are your friends and family, you may still be very concerned about what others will think if they find out you filed for bankruptcy. The key is to remember that bankruptcy can be an excellent financial tool and in using it you are making the effort to correct your situation and look forward to future financial success.
While Chapter 7 and Chapter 13 bankruptcy filings are public record, keep in mind that few will be paying attention to such notices and will likely only find out you filed if you tell them.
Contact us for a Free Bankruptcy Consultation
The experienced attorneys at Levitt & Slafkes, P.C. can answer all your questions regarding bankruptcy issues. Contact us today so one of our attorneys can evaluate your case and discuss the best options available to you. We are here to help! Call us at 973-323-2953, or contact us online to schedule a free consultation.
We are proudly designated as a debt relief agency by an Act of Congress. We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years. The information on this website and blogs is for general information purposes only. Nothing should be taken as legal advice for any individual case or situation.