Life after bankruptcy.
We’re here to help.
People have a lot of fear and misconceptions about bankruptcy. They worry that it will irrevocably harm their credit. They fear that it will become public knowledge in their community. Here’s what we tell them: This isn’t the end, it can be a new beginning. In fact, life after bankruptcy not only exists, but solid financial ground is probably a lot closer than you think. And we can help you get there.
What to expect
By the time most people file for bankruptcy, their credit can hardly get any worse. What a bankruptcy does is create room for your credit to start moving in the only direction that’s left – up.
The good news is that you can make progress a lot faster than you may think. Yes, a bankruptcy filing will stay on your credit record for 10 years, but with a Chapter 13 bankruptcy, your credit begins to improve almost immediately, by making your monthly payments. In about a year or so, you may even be able to buy a house. Chapter 7 filers may be able to buy a care within weeks or months after the trustee hearings.
If you have questions, Prescott is here to help. Having filed over 70,000 bankruptcy petitions in Minnesota, our lawyers know what it takes to go through bankruptcy – and emerge happily on the other side of it.
Will people know?
Bankruptcy is a matter of public record, but aside from your creditors (who receive notice), no one will usually know that you’ve filed unless you tell them.
Bankruptcy lists are seldom, if ever, published anymore in the general local papers unless you have a business case.
Keep in mind also: Bankruptcy doesn’t carry much social stigma anymore. Unemployment, a major illness, divorce, credit cards, taxes – these things can and have pushed people from all walks of life into bankruptcy court. Misfortune can strike as all, and there’s no shame in seeking relief from the financial hardship it can cause.
Your basic steps forward.
Once your bankruptcy has been granted, debts will be discharged and you will be required to attend a mandatory consumer credit counseling session. From there, it’s a matter of making smart choices and not taking on more debt than you can handle.
When you hire us, we will develop a debt relief plan tailored to your needs. Almost immediately after you receive a Chapter 7 bankruptcy discharge or start making payments on your Chapter 13 plan, you’ll start to receive high-interest credit card offers. Instead, consider getting a secured credit card with a low limit. If you continue to meet all your monthly obligations or make all your scheduled Chapter 13 payments, you’ll probably qualify for a car loan with decent credit terms in six months to a year. In two to four years, you should be able to qualify for a home mortgage on decent terms as well.
Healing your credit.
Both during and after bankruptcy, there are some simple steps you can take to get your finances back on track:
- Make all of your payments in full and on time.
- Start a savings account
- Monitor your credit report.
- Get a secured credit card or loan with the lowest rate possible.
- Make a budget and live within your means.
Another good idea: Obtain a copy of your bankruptcy discharge as proof that all dischargeable debts have been cleared. You can get a copy of your discharge by contacting the clerk’s office of the United States Bankruptcy Court of the District of Minnesota. Check your credit report three months after your bankruptcy is complete to make sure all discharged debt has been removed. If it has not been removed, you can give the discharge report to the credit reporting agencies so they can correct the error.
Life After BankruptcyBefore of credit offers that come in right after bankruptcy. Rates and fees will be high. Instead, focus on rebuilding your credit rating. The more progress you make, the better offers you’ll receive.