Life After Bankruptcy Is Better Than Most Americans Think, Says New York Times
For a growing number of Americans, filing for bankruptcy may be the only realistic solution for eliminating crushing debt.
Unfortunately, many of these potential filers put off seeking bankruptcy protection because of a common misconception.
Since notice of a bankruptcy filing will remain on an individual's credit report for 7 to 10 years, most people automatically assume they will be unable to obtain loans or credit for many years after filing.
In reality, most folks can get approved in as little as a year, according to the New York Times.
As long as bankruptcy filers continue making an effort to improve their finances, having a bankruptcy "black mark" on a credit report doesn't mean all that much.
For instance, those who reorganize their debts through Chapter 13 bankruptcy can apply for a mortgage backed by the Federal Housing Administration just one year after filing. In contrast, people who file for Chapter 7 - which has the power to discharge most or all unsecured debts - must wait two years.
According to the Times article, borrowers able to quickly re-establish their credit stand the best chance of being considered by lenders.
In some cases, the situation leading to bankruptcy can also make a difference. For example, if circumstances outside of your control are responsible for your debts - such as illness, death of a spouse, or divorce - it may be possible to reduce the waiting period for a mortgage by writing lenders a hardship letter.
Of course, all this isn't to say that life after bankruptcy is always a walk in the park.
Bankruptcy itself doesn't make financial problems disappear. What bankruptcy does do is provide the framework for consumers to solve their financial problems, even if those problems once seemed impossible.
Obtaining the full benefits of bankruptcy protection requires determination and a commitment to improving one's finances. But with a little hard work, the right bankruptcy plan can get you out of a heap of debt.
Want to learn more about bankruptcy? Call DebtStoppers at 800-440-7235 to discuss your financial situation with one of our professional bankruptcy attorneys. Call today to schedule your free one-on-one debt consultation.
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Compared with Bankruptcy, Mortgage Modifications Do Little to Help Housing Crisis: September 28, 2012
Additional Resources:
Life After Bankruptcy, by Vickie Elmer, The New York Times