Bankruptcy isn’t the dirty word it used to be. Many people are now seeing it as a viable option to renew their credit score and get their future back on track.
Know that there can be life after making this decision, and consider these steps to rebuilding their finances.
It is very hard for many individuals to stop feeling like a failure because their finances are in such disarray they have to start over. Experts in the field of psychology have equated this decision at the same level of emotion as divorce or suffering a death of someone close to you. So, you will experience some form of the Five Stages of Grief as set forth by Elizabeth Kubler-Ross:
- Denial: You will keep telling yourself that all is well, and you will find something soon to remedy the financial burden.
- Anger: When that doesn’t happen, you will verbally lash out at the “system” for not giving you a chance or you will blame it on the economy or some other entity.
- Bargaining: This will lead to looking for a quick solution that really doesn’t suit your needs like taking a minimum-wage job “temporarily”.
- Depression: Once you bargain your way into a no-win situation, you start to gather an overall feeling of hopelessness that you will never financially recover. This is when you start to consider getting help.
- Acceptance: You will finally come to the realization that you have made a decision that may not be the choice you had hoped for to get you out of debt, but the bonus may be that you saved yourself from losing your home or another asset that is important to you.
Rely on your Attorney
When you have finally accepted that a professional needs to be involved in the process, your attorney will help shoulder the burden with you and be your mental and emotional guide through whatever steps need to be taken to lessen the amount of anxiety you are feeling. There is a national association of attorneys where you can find one in your area. For more information go to the non-profit website at https://www.nacba.org/
Anything that is mysterious or unknown tends to create more anxiety for someone, so begin to read up on what the process really is and what it entails. In this way, you are making a conscious and informed decision. When you feel as if you are in control of your own decisions and your own future, anxiety, depression, and hopelessness tend to go away.
Consult a Professional or Clergy
For some, working through the bad feelings is very hard on their own, so the need to consult someone to talk through their feelings is essential to the process. This can cost a lot of money, so look to your local county offices for professional counseling services at a reduced rate or even no cost at all. They can offer you anyone from an actual MD, or RN to a licensed family counselor, psychologist or social worker to help you. Go to this link for more information: https://www.psychologytoday.com/blog/freudian-sip/201102/how-find-the-best-therapist-you
Obligations to the Court
Filing does not end the responsibility for some individuals, so you need to utilize your attorney for this information. Each state has different rules that govern what can be discharged and what can’t. This also includes federal laws that change on a regular basis. Some of the areas that need to consider are:
- Income taxes
- Real estate assets
- Any court-ordered payments like child support or alimony
- Student loan debt
- Any court judgments concerning liability
- Fraud victimization
- Any recent advances on a credit card or at a cash loan service
All of these have may have unique situations attached to them including whether the creditor accepts the discharge or not. Also, the creditor may have taken action against the debt while you were in the process of filing, so it may change whether it is allowed to be discharged.
Reaffirming Debt and your Responsibility
Your responsibility toward the debt that you may still have needs to be discussed in detail with your lawyer. You will be asked to sign a reaffirmation agreement with each debtor to agree to continue to pay that debt. The amount of the debt is usually negotiated down to your benefit. Including in this typically are new payment terms for the debt as well.
Your Future Finances
You now need to take stock in your future and have a new attitude and plan your finances. Consider the following steps – Gather information about your current finances- Use this information coupled with an ongoing relationship with a credit counselor to learn how to better manage your money and avoid the same circumstances happening all over again.
Continue to Consult with Consumer Counseling Services- you will find all the services they offer at https://www.credit.org/cccs/ Create a Monthly Expense Schedule- You can create actual expense outlines through credit counseling services that will create a schedule of payments for you that include:
- Undischarged credit card debt
- Medical bills
- Outstanding personal loans
- Household expenses
- Any new debt since the bankruptcy