Here is what you need to know right off the bat, there is absolutely life after bankruptcy. Ironically for many their financial lives turn out to be better and stronger than before. Almost all the negative preconceived notions you may have about bankruptcy are generally incorrect. That surprises most people.
Let’s look at some of the key areas of life after bankruptcy.
Your Credit – Life After Bankruptcy
Chances are most likely your credit was already taking a beating when you elected to file bankruptcy. Filing bankruptcy actually put a quick halt to much of that negative information. About 70 percent of people file a chapter 7 bankruptcy so only a few months exists between the time they file and the time their debt is discharged.
Immediately after their discharge they should be focused on rebuilding their credit. It can be rebuilt quickly using this guide of mine.
If you follow that free guide you can rebuild your credit very quickly without going into debt. It’s the best approach to be credit eligible again without the consequence of being in debt.
Buying a Car – Life After Bankruptcy
Until you get your credit rebuilt the interest rate you may be charged will be higher than normal but that won’t stop you from buying a car after bankruptcy. If you do rebuild your credit, within a year after bankruptcy you should be eligible to buy a new car again.
Your initial reaction may be to avoid a new car but you may just find the new car financing to be very competitive even for people that have filed bankruptcy. Car manufacturers want to sell cars so in my experience they are more willing to take a chance on someone.
Besides, after a chapter 7 bankruptcy you can’t file again for eight years. The lenders are less worried about you filing again and have the car as collateral anyway.
Buying a Home – Life After Bankruptcy
Again, you need to focus on rebuilding your credit right after your discharge but within two to three years after bankruptcy you will be mortgage ready. The irony is that without filing bankruptcy you probably would not have been able to save money and accumulate a downpayment for your new future house.
About a year or so after your bankruptcy, as you are continuing to build your downpayment fund, you will want to find a mortgage broker and be open with them about your bankruptcy. Let them know you want to get ready to buy a home and they will guide you through the process and get you qualified for a new mortgage.
Getting a Job – Life After Bankruptcy
Will you be able to get a job? Most people can without a problem. Of course there are some occupations, like financial or fiduciary, where bankruptcy might create a bit of an issue.
Renting a Home or Apartment – Life After Bankruptcy
You will be able to rent a place to live after bankruptcy. However, it may be initially more difficult from a major apartment complex. They tend to have stricter criteria and a lot of applicants to choose from. Instead, focus on smaller apartment complexes or private landlords. You can always offer to put up a larger security deposit to ease the mind of the landlord. I can’t think of a single person over all these years that followed my instructions and was not able to find a place to rent after bankruptcy.
Doubting Yourself – Life After Bankruptcy
This is one of the most interesting issues people deal with after bankruptcy. I know I did when I went bankrupt in 1990. Afterwards I felt terrible about it. It wasn’t until years later that I put it all into perspective and saw that for me it was the right thing to do at the time.
Don’t let artificial and internal judgments weigh you down. instead, learn more about the natural emotional stages that everyone deals with.
The Reality – Life After Bankruptcy
If you file bankruptcy with the knowledge that it is a reasonable and logical solution for you, you will find that life after bankruptcy is less traumatic than most fear. There are some adjustments to deal with. For example a chapter 7 bankruptcy will be on your consumer credit report for ten years and a chapter 13 bankruptcy for seven. But just because it is listed on your credit report is not a reason to fear it. Accounts that have gone into collection will be listed for seven years as well.
The more you can embrace bankruptcy as a necessary, reasonable, and logical path to follow to deal with your situation, then the more likely you will recover faster and stronger.
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