What to Expect After Bankruptcy
Jan. 19, 2021
In 2020 almost 20,000 people filed personal bankruptcy in the Chicagoland area. Economists expects more and more people will need bankruptcy relief.
There are 2 bankruptcy chapters for individuals: 1) reorganizing debts under Chapter 13, or 2) a full discharge of debts under Chapter 7. We’ll cover the differences soon. There's also Chapter 11: mainly for businesses and companies.
Folks often ask: What happens after bankruptcy? How do I restore my credit and start moving forward?If you’re in Chicago or the surrounding areas, contact us at Robert J. Adams & Associates (312-872-8443). We can assist you in filing and also help you going forward.
Initial Steps after Filing for Bankruptcy
Are you thinking about filing bankruptcy? Then, you should be thinking and planning about the future:
Chapter 13 bankruptcy allows you to consolidate and reduce your debt load with an affordable payment plan of three to five years. Your debts are discharged when you complete the plan.
Chapter 7 bankruptcy to get a discharge of your debts and it gives you the flexibility to keep your financed car or your home that has a mortgage.
A Chapter 13 filing will stay on your credit record for seven years, and a Chapter 7 for 10 years. While in the Chapter 13, you may not take on any new credit without the court’s permission.
When you file Chapter 7 you can immediately begin seeking new credit. Many of the clients of Robert J. Adams & Associates finance a car within a couple of days.
Filing Bankruptcy gives the power AUTOMATIC STAY. It is a STOP SIGN to creditors. No more calls, letters, emails, garnishments, repossessions, or foreclosures. If a creditor violates the AUTOMATIC STAY they can be sanctioned by the court. The good news is almost all creditors stop collections.
After filing bankruptcy you can start planning your life with the fresh start and focusing on how to build your credit score.
Monitoring Your Credit Scores
Most people filing bankruptcy have a low credit score. Overdue and missed payments have taken a toll on you. Once you file you’ve cleared away you unmanageable debts, or at least consolidated them. Creditors may start working with you. But, be wary of unscrupulous creditors with high interest and fees. You don’t want to restart the vicious cycle of unmanageable debt.
Check your credit score frequently. Avoid falling into the same traps you were in before that led to your onerous debt load and bankruptcy. If you find errors on your credit report, be sure to challenge them and get them corrected or eliminated.
Repairing Your Credit Score
A few proven methods of rebuilding your credit include:
Getting a Credit-Builder Loan
Are you a member of a credit union? Many will give you a small loan secured by your savings. Repaying the loan on time will raise your credit score.
Setting up a Secured Credit Card
You deposit money with a bank. They issue a credit card with a limit of what you deposited. Then, pay the balance in full each month. This practice will help raise your credit score.
Accept a Credit Card Offer
Some institutions will offer you for a credit card after you filed for bankruptcy. Often, the offer will come with a high-interest rate and a yearly fee. If you pay the full balance each moth your credit score will rise.
We Want to Help You
We at Robert J. Adams & Associate have a long history of helping people. We always use facts to lay out options for clients. We guide folks as they enter bankruptcy and to successfully exit bankruptcy. We want you to be debt free. We’ll help you every step of the way and offer you solid guidance to get your financial house back in order.
Contact us today for a free consultation about your rights under the bankruptcy code. Let’s get you ready for a fresh start. We are available by phone (312-872-8443) every day of the week.
We represent clients in Chicago, Cook County, Waukegan, Lake County, Will County, McHenry County and DuPage County.