Timothy Reynold’s Blog

Chapter 7 bankruptcy is a court process that may eliminate most kinds of unsecured debt, and is fully sanctioned by and defined in United States federal bankruptcy law. Unsecured debt includes such things as credit card debts, personal loans, car accident judgments, deficiencies on repossessed vehicles, and most medical bills. Here are some facts you should know about Chapter 7 bankruptcy.

First, be aware that the stigma associated with such things has virtually vanished. The truth is, most people who hear the word “bankruptcy” and shudder, really don’t know anything about it. It is true that Chapter 7 will remain on your credit report for up to 10 years, but you don’t have to wait that long to get on with things.

Credit is the willingness of others to lend you money. Once your credit has been destroyed by bad money management, poor judgment, or an unfortunate disaster such as a personal injury, car accident, or lengthy illness, Chapter 7 can help you start over again. Once you successfully file Chapter 7 bankruptcy you can start rebuilding your credit almost the very same day. If you are doubtful, ask yourself whether you’d rather loan money to the person you are now, with loads of credit card debt, or the person you will be after your bankruptcy has been discharged.

As for your current mortgage lender and automobile finance companies, they are usually more than happy to continue on with your current monthly payments after a Chapter 7. This is called reaffirming your debt. These companies want to make money, not repossess your property.

If you do not presently have a car loan, or a mortgage, then shortly after your bankruptcy is discharged, you will be able to arrange for a vehicle. Within two years, with a minimum down payment and evidence of income, you will be able to put an offer on a house.

Surprisingly enough (or maybe not) credit card companies - the very ones who get most people into credit trouble - will be the first to offer you credit after a bankruptcy proceeding. Of course they have their own motives for getting you back onto credit cards. But if you are careful you can use this to your advantage. You can use this readily available source of funds to rebuild your credit. But be careful. You do not want history to repeat itself. Be extremely careful how you use your new credit cards. Do not extend your cards to their limit, and try very hard to pay your balance off every month.

Your most important step when considering bankruptcy is to consult with an expert in the field - a qualified and experienced bankruptcy lawyer. It is only common sense that a bankruptcy attorney who specializes in bankruptcy filings has the required know-how and experience in bankruptcy law to handle your case in the best possible way for you.