A fellow attorney of mine tells his clients, "After bankruptcy, you will be amazed at the number of credit offers you receive. Creditors believe that you have a 'taste for credit' and will send you new offers from the moment your case is done."
While I can’t make promises about the future, from what I’ve seen he’s right. Credit makes the world go ‘round. Endless lines of credit are necessary for the modern world to function. And nobody knows this better than the creditors. This is why they will never kick you out of the credit club, no matter what you do. I often hear tales of someone who declared bankruptcy and then bought a house or a car a year later. Since you can only declare Chapter 7 bankruptcy once every 8 years, creditors know you’re good for it. Don’t get me wrong, bankruptcy is not a situation that should be entered into without lots of thought, but I want to make the point that it’s not nearly as detrimental to your future as you might first think. Most of the hardship is the fear that people feel before they file. Once all is said and done, credit scores heal quickly and creditors once again get in line to offer you opportunities just like in years past. So don’t worry about it too much. Bankruptcy is not the end of the road, it’s the first step to a better life. Unless you have a whole lot of expensive things, then generally yes. If you have several cars, lots of jewelry or expensive toys, then some of these may be forfeited and sold to repay your creditors.
Even if you do have these things, there are certain ways to shield them from forfeiture. This is where the advice from your attorney on what to do with your possessions and how to properly present information on the forms will come in very handy. The U.S., and especially the state of California, are generous with “exemptions,” or types of property that you do not need to forfeit. Most middle-class Americans emerge from bankruptcy keeping everything they own. But it is very important that you don’t do anything out of the ordinary in the months before declaring bankruptcy. If you charge big-ticket items on credit cards or transfer large amounts of money or property to friends and relatives, this will make the court look closely at your finances. Secured property may be “redeemed” or “reaffirmed,” meaning that you can keep the item while making payments on it, or you can have the court revalue the item and you can pay off its lower value in a lump sum. |
AuthorWilliam Skinner, ArchivesCategories |