The major fear for most people who consider bankruptcy is that if they file, their financial life will be ruined forever. Joe was no different. Joe had a great job and under normal circumstances would have been able to pay his debts.

However, Joe had just gone through a terrible and expensive divorce. That, combined with a work-related injury which left Joe unable to work for a period of time, caused him to rely on credit cards and personal loans to get by. Before he knew it, he had accumulated over $50,000 in debt. The last thing Joe wanted to do was file for bankruptcy.

Joe was concerned about life after bankruptcy. He heard rumors and horror stories about people who file bankruptcy that can never get a mortgage, car loan or other credit needed to live a normal life. The rumors were wrong and we explained the real facts to Joe.

The fact is that any bankruptcy does go on your credit report and will remain there for 10 years. However, that does not mean that you cannot get credit for 10 years. The truth is that any bankruptcy is simply a negative mark on your credit report. From a credit score standpoint, it is not much more significant than having substantial amounts of debt or late payments. The truth is that many people who consider bankruptcy have already caused significant damage to their credit report.

With our advice, Joe decided to file for bankruptcy. It was an uneventful Chapter 7 which eliminated Joe’s debts in a period of about 4 months. But that’s not where Joe’s story ends.

We worked with Joe to develop strategies to rebuild credit. We told Joe that shortly after receiving his bankruptcy discharge he would receive offers for new credit cards. These would be BAD offers (low credit limits and high interest). However, we advised Joe that he should take some of these offers. We told Joe to use these bad credit cards sparingly and only for things he could pay cash for, such as gas and groceries. He then needed to pay them off ON TIME each and every month. We also advised Joe to make sure to pay his existing car loan on time each month. You would be surprised just how quickly these simple strategies will help a credit score improve.

We also advised Joe to sign up for a credit monitoring service, like Credit Karma. That way he would know immediately if anything negative was reported on his credit. He could then take steps to dispute and/or fix the problem immediately.

We checked in with Joe periodically. Two months after receiving his bankruptcy discharge, he got several bad credit offers. Joe took three of them. He followed our strategies and worked hard to rebuild his credit. Joe’s credit score improved. Six months later he was able to get a new car loan for normal market interest rates. In just under two years, Joe’s credit score was better than before he filed for bankruptcy. About three years after the bankruptcy, Joe was able to buy a house and has not had any further financial difficulties.

At Contant Law, we are not here just to help you eliminate debts. We also want you to succeed at the fresh start that a bankruptcy offers you. Bankruptcy is not for everyone – give us a call to learn more and decide for yourself whether it could work for you.

Return to normal after bankruptcy

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