It may feel as though bankruptcy equals failure but that’s not why it exists. Bankruptcy is intended to give people and small businesses a fresh start when money troubles grow too large to overcome. Bankruptcy can give you a new financial beginning. It will allow you to start rebuilding your credit so you finance a car or a home in the not so distant future.
The concept of forgiving debts goes back to biblical times. In the book of Deuteronomy 15:1-2 the bible states:
“At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor. He shall not exact it of his neighbor, his brother, because the Lord‘s release has been proclaimed.”
The United States has had bankruptcy laws in place since 1800. Today, the most common types of personal bankruptcy for individuals are Chapter 7 and Chapter 13.
Whether a person qualifies for Chapter 7 or Chapter 13 is, in part, determined by their income.
As much as 65% of all U.S. consumer bankruptcy filings are Chapter 7 cases. Chapters 7 bankruptcy is often called “straight bankruptcy” or “simple bankruptcy,” it allows consumers to eliminate just about all of their debts over a period of three or four months. Typically, the only bills that survive a Chapter 7 are student loans, child support obligations, some tax bills and criminal fines. Credit cards, pay day loans, personal loans, medical bills, and just about all other bills are discharged.
Once your debts are discharged in bankruptcy, you will likely have more disposable income. You can start repairing your credit by taking out a secured credit card, making small purchases on it and paying it off, in full, every month. Banks will start sending you offers for credit as soon as you file bankruptcy. (Beware applying for unsolicited credit because it usually comes with high interest rates and penalties.) Once you start rebuilding your credit you can apply for a car loan and eventually a mortgage.
Bankruptcy does not equal failure. It will gives you a new financial start.
If you live in the Upper Peninsula and want to know what bankruptcy can do for your financial situation, call the Upper Peninsula Bankruptcy Lawyers at Church and Korhonen, PC today, 906.226.0001. We offer a free initial consultation to determine if bankruptcy is right for you.
Begin your journey to a new financial beginning today.