Hudson Valley Area Bankruptcy Lawyer
Life After Bankruptcy in Rockland County, New York
Despite the overwhelming stress and financial challenges of taking care of your family when buried under a massive debt load, many people elect not to seek bankruptcy relief for a variety of reasons. Some people assume they cannot qualify for bankruptcy relief while others fear the consequences or possess concerns about the moral status of avoiding financial obligations. Bankruptcy might not be the right debt relief alternative for everyone, but more than a million people use the bankruptcy process to reclaim their financial future each year. Rockland County bankruptcy lawyer Robert S. Lewis has provided a candid assessment of life after bankruptcy and concerns about filing bankruptcy.
What Are the Consequences of Filing for Bankruptcy?
Bankruptcy is a powerful legal tool because it can wipe out tens of thousands or even hundreds of thousands of dollars in unsecured debt. Nonetheless, there are legitimate adverse consequences that debtors must consider before filing for bankruptcy relief.
Impact on Credit Rating: A bankruptcy discharge can remain on your credit report for up to ten years. Your credit rating will suffer a significant negative impact if you file for bankruptcy protection. However, this negative short-term impact is often trumped by the long-term impact of a bankruptcy discharge. Because the bulk of your unsecured debts typically will be extinguished, your income to debt ratio improves immediately. After a period, you will have creditor approach you with “secured credit cards” or high-interest credit offerings. If you are careful about making timely payments on these less favorable credit alternatives, you will start to see offers for unsecured credit cards with customary interest rates.
Concerns about Employment Applications: This is a concern that has become increasingly relevant because a growing number of companies now run background checks on job applicants. While a bankruptcy might be viewed negatively shortly after it appears on your credit report, it might not have any more impact than a credit report full of late pays and write-offs. If you obtain a bankruptcy discharge, you can build a positive post-bankruptcy credit history that shows a record of timely payments.
Morality of Avoiding Financial Obligations: Some debtors are uncomfortable with the moral implications of avoiding payment of legitimate financial obligations. However, many people forced into bankruptcy have limited control over their situation. Examples of reasons that some debtors file bankruptcy include:
- Staggering medical bills from a serious illness or injury;
- Job loss due to a downturn in the economy;
- Business failure; and
- Family tragedy like death or catastrophic injury to a breadwinner.
These are situations that confront some of the most successful and responsible people throughout the country. Bankruptcy is deeply rooted in our founding documents as envisioned by those who embodied the moral principles upon which our country was established. Despite the legacy of bankruptcy protection in U.S. history and our founding principles, you can always file Chapter 13 and repay your debts over a longer period of time if you still have moral concerns.
Why Bankruptcy Is Worth the Potential Consequences
Unless you desire to be a “financial martyr” suffering forever because of a period of inadvisable financial decisions or unforeseen circumstances, the benefits of bankruptcy are too significant to ignore. If you file bankruptcy you can experience some or all of the following benefits:
- Keep all of your assets (almost all Chapter 7 bankruptcies are “No Asset Chapter 7s”) because the debtor’s assets qualify for exemption;
- Relief from most unsecured debts or the ability to repay such debts over a 3 or 5 year term;
- Injunction against most debt enforcement, such as repossession, foreclosure, lawsuits, wage garnishment and harassing phone calls or letters; and
- Participation in credit counseling to avoid future problems.
Rockland County bankruptcy lawyer Robert S. Lewis recognizes that filing bankruptcy is a big and potentially scary step for many consumers. However, millions of people like you wake up in the morning without the fear of being served with a lawsuit or having their car repossessed because they obtained bankruptcy relief. If you have questions about bankruptcy, we invite you to contact the Law Offices of Robert S. Lewis, P.C. at 845-358-7100. Se habla Español.