For people buried in debt, it can be difficult to imagine what life will be like when that debt is no longer there. The decision to file bankruptcy is a difficult one for many people in Wisconsin, yet it offers many benefits and advantages.
Despite the stigma often associated with it, both Chapter 7 and Chapter 13 bankruptcy brings new hope to many families. For those that follow certain steps, credit can be rebuilt relatively quickly.
Many Americans struggle with debt. In fact, most consumers carry a balance on credit cards, have student loans or unpaid medical bills. When these bills begin to outpace a person’s ability to pay, it can quickly lead to a spiral of harassment from debt collectors and threats of foreclosure and more. If you choose to file for bankruptcy, you may regain control of your financial future.
What can I expect after bankruptcy?
The relief bankruptcy brings often comes in stages. As soon as a bankruptcy filed, people experience the immediate relief provided by the automatic stay. Creditors stop calling and people realize they no longer have to be afraid to answer the phone.
After attending a 541 hearing and completing a financial management course, people who file bankruptcy wait for their case to be concluded.
For individuals filing Chapter 7 bankruptcy, their dischargeable debt is eliminated at the conclusion of their bankruptcy a few months after the hearing.
For individuals filing Chapter 13 bankruptcy, their dischargeable debt is eliminated at the end of their plan, which usually lasts anywhere from three to five years.
The type of bankruptcy right for you will depend on the details of your unique financial situation and should be discussed with an attorney.
Rebuilding credit after bankruptcy
One of the main reasons that people do not file for bankruptcy is because they fear that it will ruin their credit forever. Life after bankruptcy can be complicated, but with a significant amount of debt gone, applicants will be able to take steps to rebuild their credit and establish strong financial footing. Some of the ways that a person can do this is by doing the following:
- Get and keep employment if you do not already have a job
- Pay all bills on time and stay current
- Keep a balance in your bank account
- Work with an attorney to clean up and correct your credit report
- Take steps to rebuild credit when able
With guidance, you can effectively navigate life after bankruptcy and begin to move toward a more stable future.
Correcting your credit report
Individuals who emerge from the bankruptcy process will find it beneficial to work with a lawyer to repair incorrect and outdated information on their credit reports. This is one of the most important steps on the road to rebuilding and restoring credit.
It can be difficult to know what to do about errors on your credit report, but your bankruptcy attorney can walk you through the steps necessary to ensure that these mistakes and misinformation do not hold you back and that the report accurately reflects your current financial state after eliminating your debt.