Conquering the feelings of shame over bankruptcy
If you struggled each month to pay your bills and often postponed one or more payments until your next paycheck, you didn’t need anyone to tell you that you were in financial trouble. In fact, you may have lived in fear that today would be the day it all fell apart. Then one day, the car broke down, someone in the family got sick or the refrigerator stopped working, and the delicate house of cards you had built to keep your creditors at bay may have come crashing down around you.
Have you stopped answering your phone or hurrying to the mailbox? Do you go to bed at night with a knot in your stomach and wake up with a headache from worrying about the bills, the foreclosure notice, the warnings from collection agencies? Do you resist the idea of filing for bankruptcy protection because you worry about the stigma and the damage it will do to your credit rating?
Facing the facts
Your credit is probably already in trouble. If you are behind on your mortgage or creditors have turned over your accounts to collections, you can be sure there are negative marks on your score. However, within a relatively short time after filing for Chapter 7 bankruptcy, you can begin to rebuild your credit.
Chapter 7 bankruptcy eliminates many kinds of unsecured debt, for example credit cards or medical bills. In many cases, the court will liquidate your property to pay a negotiated balance to your creditors. Chapter 7 cannot remove all debt. The following are some examples of debt excluded from bankruptcy:
- Child or spousal support payments
- Delinquent taxes
- Court judgments
- Student loans
However, if the bankruptcy clears some of your unsecured debt, you may have the resources to meet the above obligations. Additionally, with professional help, you may be able to negotiate many of those excluded balances.
Bankruptcy is a temporary state. Soon, you will be able to apply for credit and start with a fresh slate. Your credit rating will begin to improve, and your opportunities will increase little by little. Most importantly, you will be out from under the burden of bills you can’t pay and the obligations you can’t meet.
Having the right lawyer to guide you through Chapter 7 bankruptcy improves the chances that you will not lose your personal belongings like your home. You will have a strong advocate to fight for your interests and stand up for you to your creditors. By focusing on the hopeful future that lies ahead, you may begin to see a light at the end of the tunnel.