With the US financial meltdown and job loss at record numbers, it seems inevitable that many people will be forced into filing chapter 7. This is not the end of the road fortunately, folks can take a lesson from their financial mistakes and press on for a better tomorrow with a fresh start. With the new bankruptcy law in place it’s a little bit harder to file. Now, under the new bankruptcy law everyone must take a means test, which is a test that requires your income to be at or under the median income of your state. For most people filing bankruptcy is the last and only resort.
The minute you file bankruptcy the court orders an automatic stay and it immediately stops most actions against your property by a creditor or collection agency and it also will temporarily stop any lawsuit or foreclosure filed against you. Essentially, when you file bankruptcy, anyone who you owe money to must prove to a bankruptcy judge that you do in fact owe them the money. The judge will then decide based on your assets and current income who and what bills get paid with remaining assets. This day can be a powerful tool if you’re being evicted, foreclosed on, you’re behind on your utility bills and being threatened to be shut off, you’re late on your car payment and numerous other reasons. You can see how this would buy you time when you are in financial distress.
Believe it or not, bankruptcy is not a dirty word. It is true, it’s far better to never have to go into bankruptcy. But sometimes good people make bad financial decisions or circumstances beyond their control such as a job loss or serious illness causes a financial catastrophe and this is why bankruptcy was created. Bankruptcy was designed to help good people who got into financial trouble, and to avoid losing the roof over their head and the food on their table. People are not abusing the system so long as they did not go into debt expecting to file bankruptcy and never repay all their debts. You have to remember the creditors that lent you the money took the risk that you might not be able to pay your debts. Your future credit may not be any worse after filing than it already is after a year of late payments and judgments against you. If you’re at the end of your financial rope bankruptcy might be the solution for you.
If it is inevitable that you have to, consider it a temporary pathway on the great journey of life and try to count your blessings. Life in the USA is infinitely preferable to life in the majority of the rest of the world and you will find that with a little help from your friends and family will get through the experience intact and somewhat wiser about the pit falls of the capitalist world in which we live. When we file bankruptcy it allows us to live life once again without being constantly harassed by debt collectors. It also gives us the space we need to regain control over so many aspects of our lives and get rid of the hopelessness that hangs over our head when we have far more debts than we can ever possibly repay.
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