Being in debt doesn’t bring up the best of feelings! You get paranoid every time you see those dreaded names popping up on your phone whenever you get a phone call. Even something as simple as checking the mail becomes a test of courage. Sleeping at night becomes nearly impossible as thoughts of how to pay your debt plagues your every thought. Being in debt entails dealing with a lot of stress especially if you owe a huge amount of money you know you cannot pay. However, as a Baltimore bankruptcy lawyer, I can tell you that it is not the end of the world. You might not believe it, but a chance to start afresh is not out of your reach.
First, let us discuss why people skirt the dreaded ‘B’ word: Bankruptcy. It’s almost funny how people consciously avoid saying this word as if it were a bad omen of some sort. As if uttering the word itself could bring immense misfortune. As if it were a shameful word whispered in dark alleys at night. Think about it, even though people are up to their eyeballs in debt and they know the most obvious solution, they are still afraid to file for bankruptcy! Why is that? As an experienced Baltimore bankruptcy lawyer who has serviced numerous clients through the years, I can tell you that it is because of three things.
Fear of Public Exposure
People are afraid of getting a stain on their reputation. Bankruptcy cases can be seen in public records, and anyone who wants to see it, can. That’s why it’s called public records. However, who has the time to actually research on their neighbor, friend or co-worker, just to find out if they filed for bankruptcy? In the vast majority of cases, no one will even know that you filed for one. So no, filing for bankruptcy will not hurt your reputation that much.
Fear of Losing Control
When you file for bankruptcy, nominal ownership of everything that you have will be passed on to the Chapter 7 trustee for the benefit of your creditors. In Chapter 7 bankruptcy, the bankruptcy trustee will gather and sell all the debtor’s assets and use the proceeds to pay the creditors. However, some kinds of retirement assets are exempt. In the real world, almost 98% of Chapter 7 cases are cases with no assets. Therefore, the debtor literally has nothing to lose to the bankruptcy trustee on behalf of the creditors.
However, if you do have assets, you would prefer to file for a Chapter 13 bankruptcy. Chapter 13 bankruptcy is also referred to as a wage earner’s plan. Debtors are allowed to propose a repayment plan to pay installments to creditors for over three to five years. Chapter 13 also offers an opportunity for debtors to save their homes from foreclosure. If you choose to file for Chapter 13 bankruptcy, all you need to do is stay in control of your assets.
Fear of Never Qualifying for Credit Again
When people file for bankruptcy, they automatically assume that they can only be allowed to get credit after seven or ten years. This is due to the length of time a bankruptcy remains on their credit bureau report. However, in reality, once your discharge is granted, you’ll be able to get credit almost immediately. Don’t raise your eyebrows just yet! Think about it, didn’t you just get a clean slate by wiping out a bunch of credit balances? With the right steps, you can get new credit again even after receiving serious damage to your credit score. Here’s what you need to do:
- Your credit report should accurately reflect your bankruptcy
- Fix other errors on your credit report
- Keep paying non-bankruptcy accounts on time
- Don’t waste money or time trying to get bankruptcy removed
- Get new credit
- Make your new credit card payments on time
- Keep credit card balances low
- Apply for new credit sparingly
- Take it slow
Do not feed your fear by letting yourself succumb to the negative thoughts associated with bankruptcy. Yes, taking the first step is always daunting; however, taking that step will lead you in the right direction. Do not let debt wreak havoc in your life. Do not be afraid to ask for help from a Baltimore bankruptcy lawyer. It is always better to acknowledge and solve your problems than to have them haunt you for the rest of your life. In the face of all the negativity that bankruptcy seems to invoke in people, remember, bankruptcy is not a bad thing.