Bankruptcy was great. I got rid of overwhelming debt, the collection calls stopped, and I quit worrying day and night about how to pay the bills. Still, I had no idea there would be so many obstacles to making a new start. Years after my chapter 7 there was no light at the end of the tunnel. My aunt likes to say, “Life is a contact sport; get in the game and give it your best shot.” I finally figured out that she is right. You can’t be passive and hope things work out for the best. So, I decided to take charge, and now my life is different, better. The things you need to get your fresh start started are here.

Janelle, chapter 7

four yrs ago

SO... now that's it's done, is it not what you thought?

Do you have a bad case of post-bankruptcy blues? It’s not unusual. The financial consequences of filing personal bankruptcy, chapter 7 or chapter 13, can bring almost as much misery as the debt you had before you filed.

These days most people will say that there is no stigma to bankruptcy. What they mean is that most people don’t make the same moral judgments about bankruptcy and “bankrupts” as they did years ago. What they don’t mean is bankruptcy creates no serious difficulties and no harsh side effects.  If they do mean that, then – putting it simply – they are wrong.

Focus on the positive, but don't ignore the negative. Know the consequences.

Most people say that bankruptcy was a good thing for them. They don’t say this because BK is something to look forward to -like graduating from school or getting a promotion-  they say it because they were at the end of their rope, and they had run out of options. They generally say that the lawyers who make a living doing bankruptcy are, by and large, professionals who did a good job at taking them through the legal process. However, they will also say that the professionals paint a rosy picture of life after bankruptcy. Most people who file are not well prepared for the countless aggravations and real-life difficulties that come up afterwards.

If life after bankruptcy was too easy and too pain free, everyone would do it.

 

It’s hard, but you CAN put your financial life back together.

The biggest side-effect of bankruptcy is the way it hits your credit report. Once upon a time, your credit report was used by lenders who wanted to lend you money. Things have changed a lot. It has become a common practice for landlords, employers, and insurance companies to review your credit report as part of doing business with you. Because credit reports are now used by so many more industries, a bad credit report can really make your life difficult.

Bankruptcy records are maintained by the federal court system through the activities of the federal district clerks. When bankruptcy shows up on your credit report, you will probably find it hard to get credit. When you can get credit, bankruptcy will result in higher interest rates on your loans. As if that wasn’t enough, there are many other things, large and small, that bankruptcy will impact. For example, banks may limit the kinds of accounts they will open for you. During the bankruptcy process, the banks will close your credit card accounts, and it is next to impossible to rent a car without a credit card. That is just one of the many small headaches you might face after bankruptcy.

More importantly, bankruptcy raises the amount you pay for credit. It will often result in higher auto insurance premiums. It may keep you from getting a promotion, a raise, or a new job. If you have a security clearance or a government job, bankruptcy may create problems for you. Most landlords look at credit reports before they give you a lease, and bankruptcy may cause you to be turned down. If not, it may cause you to pay a much larger deposit. 

bankruptcy can feel like getting hit by a train, your credit cards are gone and your score is bad

Your friends don’t care if you filed bankruptcy. But here’s list of people who might care a great deal

  • bank / mortgage lender
  • credit card company
  • auto finance company
  • insurance company
  • employer / future employer
  • landlord
  • security clearance investigator

What can I do about how these people see me?

It's now clear to me, my lawyer...

has never been through bankruptcy.

Bankruptcy works, but...

I’m paying a higher price for getting rid of my debt than I ever expected.

It's not what I expected.

I had to take charge before...

I could take the bad with the good.

If you are reading this, you are probably one of the millions who have filed bankruptcy, then learned that life after bankruptcy poses some very difficult challenges.

You have questions, you want information, and you don’t know where to turn. To make things worse, you don’t have money to pay for more help, even if you knew who to pay.

If this sounds familiar, read on.  You will find most everything you need to know here and in the links to outside resources provided here.