Is There Life After Bankruptcy?

When you have taken that last drastic step financially, you may wonder is there life after bankruptcy? The answer is, of course, yes there is life after bankruptcy.
The whole purpose of bankruptcy provisions under the law is to allow desperate persons an opportunity to begin again financially with a fresh slate.
Historically, bankruptcy held other meanings and outcomes, but today the law helps the debtor start over.
Modern bankruptcy wipes the slate clean when there is no other option.
There are several types of bankruptcy, and most individuals file under either Chapter 7 or Chapter 13.
Newer laws make getting the Chapter 7 option somewhat harder to get because under Chapter 7 bankruptcy, the creditors can receive nothing.
With Chapter 13 filing, debts are reorganized and creditors do receive some payback on the accounts.
Chapter 7 eliminates all debts that are subject to bankruptcy completely.
The creditor may receive some money from liquidations.
The debtor is relieved of any future obligation to that creditor.
The debtor is allowed to keep certain assets such as their home and a vehicle.
It is possible to exclude some debts from Chapter 7 and the debtor can continue to repay those debts.
Certain types of debts such as spousal and child support, student loans or some taxes are not subject to bankruptcy and continue to be owed.
Chapter 13 is more of a reorganization plan where creditors do receive some reduced payments from the debtor.
There are four other types of bankruptcy, but most are used by businesses.
All have some restrictions involved.
There is life after bankruptcy.
Within a short period of time, the person who has declared bankruptcy will again start to receive credit offers, and may be able to obtain a loan.
They will be in the poor to bad credit range and get slapped with much higher interest rates if they are able to borrow money.
Also, their credit history will carry the huge negative of bankruptcy for ten years or longer.
This will affect many things in their life for a decade.
Life after bankruptcy may mean many doors are closed to that person.
Employers and rental agencies check credit histories.
The fact that there is a bankruptcy will act like a very large sign telling them that this person is a much higher risk and does not know how to handle money well.
To an employer, that may be enough by itself to deny someone a job, especially if that job involves handling money.
Renting an apartment may be another area of life after bankruptcy that is unpleasant.
There may be higher deposit requirements or denials.
Having a bankruptcy notation on the credit record is a constant reminder of their bad history and credit experience.
For the person who filed bankruptcy, this can be haunting or it can be a motivator to do better next time.
Is there life after bankruptcy? Yes, and having that fresh start is a great place to be, emotionally, physically and mentally.