There may come a time when you stand back and realize your debt is more than you can handle. You may have made some bad choices when during the holidays or you may have lived off credit cards between employment.Regardless of how the debt happened, you must now face the fact that bankruptcy is a viable option. What does life look like during and after you file?
Chapter 13 bankruptcy gives you time
At the onset, you must decide between declaring Chapter 7 or Chapter 13 filing. In our part of Louisiana, most individuals who declare bankruptcy do so under Chapter 13. Why? This type of bankruptcy allows a reorganization of your debt, and the process gives you up to five years to pay off debtors at a negotiated settlement.
You can keep your car
Trustees evaluate your income, your debts and your assets. Unlike Chapter 7 where the trustee may sell off nonexempt vehicles and property to pay off debtors, Chapter 13 allows you to keep more items. If you have a car loan you have regularly been paying, you may be able to keep it during the bankruptcy process.
There is life after bankruptcy
When you finish making payments under the plan, the trustee will determine the bankruptcy case is over and you will be discharged. After this point, you may start rebuilding your credit. You may be eligible for a secured credit card at some point. This type of card requires a deposit, typically $300, and that becomes your credit limit. After a period of time has passed and you have made regular monthly payments, the credit card company may release the deposit and raise your limit.
Poor financial choices do not mean that you have to live in a constant black hole of debt. There is hope for emerging and being able to make better decisions.
Filing for bankruptcy does not mean anything is over, except perhaps the bad financial situation you are currently in.