Reasons You Can Survive Going Through Bankruptcy

Bankruptcy Does Not Need to Shatter Your Finances

Just because you have gone bankrupt does not mean you will be forever limited to a cash-only existence.
Just because you have gone bankrupt does not mean you will be forever limited to a cash-only existence. | Source

Bankruptcy Happens to Nice People

Perhaps one of the most frightening experiences many people have had during the recent recession has been going through bankruptcy. However, it is reassuring to know that you can survive it, and that bankruptcy is something many nice, hard-working people have experienced. You are not alone!

There are a number of reasons why someone may need to file for bankruptcy. During the past few years, many people lost their jobs or their businesses failed. Sometimes, they became more and more dependent on their credit cards, and eventually they were unable to keep up with the payments. Even without a recession, one of the most common reasons for people to file bankruptcy has been medical bills. Developing a serious illness often creates two problems … you have lots of bills, and you may become unable to work. Whatever the reason that you file for bankruptcy, you need to realize that this legal process is designed to give you a fresh start. It does not make you a bad person. Most people feel tremendous relief once they have freed themselves of this burden of debt.


Do Not Waste Your Energy Blaming Others or Feeling Angry

Many people respond to their financial problems by feeling angry and resentful. They often want to blame their spouse, former employer or someone else for creating this predicament. Don’t let yourself get all worked up. It only makes things worse. In fact, if you blame your spouse, you may end up going through divorce and getting in even worse financial shape. Instead, you need to accept the situation and work towards finding ways to resolve it.

Bankruptcy is not the end of the world. Many famous people have gone through it ... even billionaire Donald Trump. Bankruptcy is actually the opportunity to get a fresh financial start. Once it is over, many people have a deep sense of relief.

Bankruptcy Will Not Ruin Your Life

A bankruptcy will show up on your credit reports for as long as 10 years. This absolutely terrifies many people, because they believe this means they will not be able to get a credit card or a car loan for that long. This is not true. There are many loan programs available for people who have been through bankruptcy, and you will probably begin getting credit card offers again within a year. Although your first credit cards may need to be secured cards, or will have a lower limit and higher interest rate than you may be accustomed to, there are credit cards available to you.

First Decide If You Qualify to File for Bankruptcy

Personal Bankruptcy Laws For Dummies
Personal Bankruptcy Laws For Dummies

Bankruptcy laws are very complicated and there are a lot of restriction concerning the amount of debt you have, the type of debt, and your debt to asset ratio, etc. For example, you cannot discharge student loans in a bankruptcy. There are also issues about what property you can keep, such as your home, car and retirement accounts. Make sure you are fully informed so that you know what to expect when you go see the attorney.

 

You Can Use Your Debit Card Until You Get a Credit Card

I honestly do not know how people managed to get through bankruptcy before they were able to use debit cards. However, debit cards with Master Card logos can be used almost like a secured credit card. You can use them to make hotel reservations, rent cars, and make purchases, as long as you have the cash in the bank. In fact, because many debit cards look like credit cards, your business associates will not even notice that you are now paying cash for everything.

You do not have to go around broadcasting the fact that you are going through bankruptcy. Only certain people will need this information. Everyone else will assume your financial situation is the same as always.

Use a Bankruptcy Attorney

Although you may be able to file for bankruptcy without an attorney, you will be far better off by using one.  They will make sure that you get all the debt dismissed that you possibly can, and will help you understand how to go through the process as comfortably as possible.  If you can manage it, you may want to continue making payments on certain assets that you may want to keep, such as a car or home, and the attorney will help make sure you handle that correctly.

Rebuild Your Credit after Bankruptcy

Once you have gone through the bankruptcy, you will want to work hard to rebuild your credit. You are now free of the overwhelming debt that has been crushing you. The first thing you will need to do is to look at your income, and come up with a budget that will allow you to meet all your current obligations while spending a little LESS than your current income.

The next step to rebuilding your credit is to make your payments for rent, utilities, your car and your new credit cards on time. If you make these payments late, it will take you a long time, if ever, before you will rebuild your credit!

Once you have made your credit card payment on time for a year or so, call the credit card company and ask them to lower your interest rate. If you have been using a secured card, ask them when you can get your original deposit back. Many companies will even pay you interest on the money you deposited with them.

This is a chance to get a fresh start in life. Order copies of your credit reports once in a while to make sure your credit rating is improving, and to be sure they reflect the fact that you are now making your payments on time. If you aren’t sure how to do that, you’ll find complete instructions in “How to Get a Free Credit Report.”

Good luck, take a deep breath, and realize that you are still the same, nice person you were before the bankruptcy. The only difference is that now you are free of debt, and a little wiser!

After You Have Filed Bankruptcy, You Will Need to Re-establish Your Credit

How to Get Credit after Filing Bankruptcy: The Complete Guide to Getting and Keeping Your Credit Under Control
How to Get Credit after Filing Bankruptcy: The Complete Guide to Getting and Keeping Your Credit Under Control

Even after a bankruptcy, it is still possible to get credit. You may have to start with a pre-paid credit card, or use your debit card for a while. However, gradually you will be able to start over. This book is a step-by-step guide to help you along the way.

 

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Comments 23 comments

Joshua526 5 years ago

Bankruptcy is just a state of mind, you can regain everything you've lost.


stars439 profile image

stars439 5 years ago from Louisiana, The Magnolia and Pelican State.

Wonderful hub. I know a lot of good people who had to go there. Everyone deserves a second chance at life. God Bless You precious heart.


Deborah-Diane profile image

Deborah-Diane 5 years ago from Orange County, California Author

Thank you. I also know many people who have gone through this in recent years. Sometimes, they just need a little reassurance from their friends and family that everything will be OK. I thought this would help a few of them. I agree that everyone deserves a second chance.


Seeker7 profile image

Seeker7 5 years ago from Fife, Scotland

Great hub. Anyone can survive bankruptcy. I went through this went I was made redundant from my job. It was a nightmare trying to cope with creditors - many of them were very nasty and threatening. However, I managed to get a free advice service online and they advised bankruptcy for me. I was discharged, ( you get this in the UK, but not sure about the USA), a year later and it is like having a whole new and fresh life to start again. It can be scary but there is nothing to be frightened about. In most cases it is the best solution. And you are also right about credit cards. Within 6 months of my discharge I was getting offers flooding back in - some from the very companies who were nasty previously!! I've put them in the bucket and will stick with my debit card.


DeborahFantasia profile image

DeborahFantasia 5 years ago from Italy

Fabulous article, so many people really do feel like their life is over because of bankruptcy. Your article is very informative !


Jlava73 profile image

Jlava73 5 years ago from Cyberspace and My Own World

So many people feel ashamed by the prospect of filing bankrupcy. In some cases, it just can't be helped.

Awesome article! I bet many people will find it a comfort to read and know they are not alone.


krosch profile image

krosch 5 years ago

Having gone through this myself its certainly not the end of the world. Thanks for put some good information out there for people to read. Educate yourself on your choices before going through big choices like this. There are many options and getting a lawyer is the smart move if you do file but there are many resources if you need to do it on your own. (I was so broke I did it on my own and had little to lose and it worked out well for me.)

Voted Up!


Deborah-Diane profile image

Deborah-Diane 5 years ago from Orange County, California Author

Thank you for your comments about going through bankruptcy. I'm glad that everything worked out well for you. It is frightening when it happens, but people often feel relief afterwards!


Au fait profile image

Au fait 3 years ago from North Texas

Cash still works pretty well and money orders are great too. Oh, and cashiers checks. Cards are what people are used to now, but other methods of payment still work. Even personal checks once the bankruptcy has been discharged and you can start putting money in your bank account again.

Qualifying for bankruptcy isn't nearly as easy as it used to be, but it's a great way to start over when things get so far out of hand there's no catching up. Most people who find themselves in this spot do so because of an illness or injury in the family.

Very good hub. Voted up.


Deborah-Diane profile image

Deborah-Diane 3 years ago from Orange County, California Author

Thank you so much for your comments. Even though it may take people a little time to start over after a bankruptcy, the people who go through this are often far better off in the long run. Frequently they also feel a big sense of relief, since they are usually buried in debt by the time they qualify to file for bankruptcy.


moonlake profile image

moonlake 3 years ago from America

Good information many people need in this day and age. voted up


Au fait profile image

Au fait 3 years ago from North Texas

Sometimes bankruptcy is the best way to start over, although the law changed on it about 5-6 years ago now and it's not as easy as it used to be. Going to share this with my followers this time.


Deborah-Diane profile image

Deborah-Diane 3 years ago from Orange County, California Author

You are absolutely right about bankruptcy sometimes being the best way to start over. The people I know who have gone through this often feel a tremendous sense of relief! Unfortunately, when the laws changed six or seven years ago, they made it impossible for people to get student loans discharged in a bankruptcy. Consequently, many unemployed young people are overwhelmed with the amount of money they owe.


Au fait profile image

Au fait 3 years ago from North Texas

Stopping by to pin this hub to my "Financial Issues" board. Important information for people who may need a way out. Most bankruptcies are the result of an unexpected illness or accident that creates horrendous medical bills, or because of a major disaster -- home fire, tornado, hurricane, etc. Sometimes bankruptcy is the solution.


Deborah-Diane profile image

Deborah-Diane 3 years ago from Orange County, California Author

Many people fear that a bankruptcy will ruin their lives forever. They are also embarrassed and sometimes feel guilty about going through the experience. However, it can really help those that qualify and bring them some peace of mind. In addition, within a few years they can fully recover from the bankruptcy.


vespawoolf profile image

vespawoolf 2 years ago from Peru, South America

This is very helpful information, and I appreciate what you say about skipping the anger and bitterness. My husband's cousin went through bankruptcy about 10 years ago and he and his family are much more financially healthy now.


Deborah-Diane profile image

Deborah-Diane 2 years ago from Orange County, California Author

Thank you, Vespawoolf. Your husband's cousin is proof that bankruptcy can be the best decision for many people who are overwhelmed by their bills.


Au fait profile image

Au fait 2 years ago from North Texas

Going to share this again because with this currently economy I'm sure there are a lot of people who may not know where to turn for relief. This article should give them new hope . . . shared.


Deborah-Diane profile image

Deborah-Diane 2 years ago from Orange County, California Author

Thanks Au fait. There are still many people who are struggling to recover from the financial disaster of a few years ago!


pstraubie48 profile image

pstraubie48 22 months ago from sunny Florida

There is so much I did not know about bankruptcy. I had a friend, a young friend, who was married and she and her hubby got in over their heads and had to file. I wish that I had known this info so I could share it with them .

It was a bad experience (this was about 25 years ago) ..the marriage ended in divorce.

Hopefully those who are considering this option will find and read your article.

voted up+++ shared and g+


ezzly profile image

ezzly 21 months ago

Excellent hub, especially in today's economy! Voted up !


Deborah-Diane profile image

Deborah-Diane 18 months ago from Orange County, California Author

Thank you, ezzly! So many people have gone through bankruptcy in the past decade. When it happens, it can be so scary. People need to realize that they will survive ... and even thrive afterwards.


Deborah-Diane profile image

Deborah-Diane 17 months ago from Orange County, California Author

Although the economy is improving, bankruptcy is still something that affects thousands of people every year. It is reassuring to know that this is an opportunity for them to get a fresh start and it is something they can survive.

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