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Bankruptcy FAQ

What to expect after a bankruptcy

On Behalf of | Jul 4, 2023 | Bankruptcy

Life easily gets complicated. For some people, that includes facing debt piling up.

According to the United States Courts, 387,721 bankruptcies occurred in 2022. Although a last resort and often shrouded in negativity, bankruptcy also provides new beginnings.

Creditor calls stop

One of the worst parts of debt comes in the form of constant calls from creditors. Once you file for bankruptcy, collection calls stop immediately. Usually, any credit card you have gets shut down and closed, including those without a balance. Although not all your debts may get discharged, most unsecured debts do get discharged, giving you peace of mind that you no longer have to deal with a barrage of phone calls and added stress.

Credit counseling begins

Before filing, you will likely need to attend a credit counseling course. The same applies after the bankruptcy gets finalized. Typically, you must complete the course within 60 days after the required meeting with the trustee. Along with helping you better understand financial management, completing the course ensures that the bankruptcy judge discharges your debts.

Rebuilding credit starts

Along with protecting you from further action from creditors, many people find bankruptcy an opportunity to start over the right way. Although it takes time to rebuild credit and may take years before you can get a loan or mortgage, many credit card companies still offer people who have filed for bankruptcy the chance to get a low amount of credit. Minimally using it and not carrying a high balance lets you bolster your credit rating.

Bankruptcy may not provide the right solution for everyone, but it may offer some people the clean slate and peace of mind needed to make a new start.