Some people who are drowning in debt may consider bankruptcy because they have heard it can provide a clean slate. Indeed, it is something that our Fort Lauderdale Chapter 7 attorneys have said many times. But is it actually the case? In a nutshell: yeah. But before you file, you should know what that entails so you know what to expect. Consider taking Help from a bankruptcy attorney.
What does getting a “new start” mean after filing for bankruptcy?
Filing for bankruptcy releases you from your debts, giving you a clean slate to repair your credit and take control of your finances without further compromising your lifestyle. Under Chapter 7 bankruptcy, much or all of your unsecured debt is forgiven.
Chapter 13 is different, yet it still gives you a new beginning. With this form of bankruptcy, you and your creditors work out a plan for gradually paying off your unsecured debt. In most cases, the duration of such a programme is lengthy, lowering your monthly payments and giving you a chance to start over.
What the Supreme Court Says About Bankruptcy as a New Beginning
Chapter 7 bankruptcy as a new financial beginning is more than a marketing ploy. The US Supreme Court established the concept of bankruptcy as a “new start” in 1934. The Supreme Court has ruled that filing for bankruptcy can be a way to start over financially without having to worry about obligations in the past. The majority of your debt might be eliminated thanks to the new beginning bankruptcy brings. You’ll also be able to manage your finances and build credit in new ways.
Falsehoods About a New Beginning
While filing for bankruptcy can provide you a new beginning, it’s vital to remember that it may not solve all of your financial problems. You may still be responsible for debts incurred due to a court order after filing for bankruptcy, such as back taxes, child support, and student loans.
It’s also important to remember that just because you declare bankruptcy doesn’t guarantee your credit will magically improve. The debt has not been settled. There is no longer any need for you to pay for it. As a result, it will continue to be reported to credit bureaus. Despite the statute of limitations that has passed on any legal action over the debt, future loan and credit applications may be declined.