What does Bankruptcy Fresh Start Mean?
According to the US Courts, over the last two years, roughly 413 thousand people filed for bankruptcy. Of those cases, nearly 310,000 filed for Chapter 7. This bankruptcy filing is commonly referred to as creating a “Fresh Start.”
A fresh start post filing Chapter 7 bankruptcy is misleading. While it does not erase financial debt, it instead offers a more strategic process to pay creditors dues owed or support in liquidating non exempt assets.
US Courts mentions the primary purpose of this is to discharge certain debts giving an honest debtor a “fresh start.” The debtor has no liability for the individual discharged debts. Waiting too long to file for bankruptcy can put your assets like your car, home, property and even your retirement accounts at risk to creditors.
So if you’re feeling alone in this bankruptcy process, you’re far from it. Dethlefs Pykosh & Murphy Attorneys At Law have helped carefully support the Camp Hill and York communities with their extensive experience to secure their clients financial futures. Filing for bankruptcy could be the fresh financial start needed to get back on track.
“Paul Murphy was very helpful in explaining the bankruptcy process in terms even I could understand. He made the whole situation much less stressful and for that I am grateful.” – Brook L.
What is life like post bankruptcy?
Once you take the first step to declare bankruptcy, you can take a deep breath to relieve some of the pressure on your shoulders. Whether you filed for chapter 7, chapter 11, or chapter 13, this filing will give you the opportunity needed to create a new start forward.
Budgeting, setting financial goals, and even working on improving your credit are all things that are within reach.
After you file, but before your debts are discharged, you will get the opportunity to go through financial management courses also referred to as “Credit Counseling and Debtor Education Course.”
Through the course, you will learn how to properly manage your finances in a way that works for you and your family. Remember, the way matters were handled in the past led down this road. So, it’s important to keep an open mind and learn something new. Afterall, a certification of completion is required.
Items like gaining a credit card will be important to rebuilding credit. First, you will need to start rebuilding trust with your bank. The key to building trust with a bank is to make payments on time and at the full amount lended.
Let’s talk credit score post bankruptcy
If you file for bankruptcy, yes, your credit will take a hit. However, if you wait too long to file, your finances may become unmanageable. When bills are unpaid and debt snowballs, your credit is the first to plummet.
Filing for bankruptcy will show on your credit report. However the length is dependent on a few factors. A negative report was created, however the older the debt is, the less impact it has on your credit score.
There are six different chapters of bankruptcy however, Chapter 7, Chapter 11 and Chapter 13 are the most common.
- Chapter 7 stays on your credit report for ten years
- Chapter 11 stays on your credit for up to ten years
- Chapter 13 stays on your credit report for seven years
Rebuilding your credit might seem like a daunting task but with realistic expectations and specific goals- it can be done with the right resources to guide you.
Still have Bankruptcy “Fresh Start” questions?
If you are feeling overwhelmed, contact our bankruptcy attorney, Paul Murphy today. At Dethlefs Pykosh & Murphy, we will help you through the bankruptcy process and ensure your financial future gains the fresh start it needs.