This is the final part 11 of 11 of my bankruptcy experience series.
For many people bankruptcy is a horrifying word. A word that means financial ruin, being black listed from society and never getting credit again.
Is that true? Not in the slightest.
I had a wonderful bankruptcy experience. From start to finish it was extremely easy and pain free. The parts about it that were bad, were made up in my head by fake “what if” scenarios.
At first I had some guilt about it, due to the “ethics” part of it. That was mainly because the people in my life at the time told me it was unethical and it really went to my head. Once I got out of my own head about it and realized that it would give me the fresh start I needed I was okay.
I filed for chapter 7 bankruptcy in July of 2022. It was a much needed solution to a debt problem that had been happening for the last several years. For me, bankruptcy was a way out. A fresh start. A way to move on with my life and create a future for myself. At that point every decision I made depended on if I had made all my credit card minimum payments and if I had money in my account. In my opinion, that is a life that everyone should have.
The amount of debt that I had in conjunction with my income was causing me so much stress that I was gaining weight, my hair was falling out and a full night's sleep was a distant memory. I needed to do something.
In the past I had done a debt management program, I thought about trying it again but the payment would have been too large. I briefly started the process of doing debt settlement but that payment still would have caused me an issue financially. We needed a way out. Bankruptcy was that way.
I had a great bankruptcy attorney. Our attorney went above and beyond to make us feel heard and to ease any anxieties we had. I firmly believe that she was a major contributor to why I had such a positive bankruptcy experience. You can search for a reputable attorney that serves your area by taking our attorney fee bankruptcy calculator.
The moment we filed our bankruptcy we both felt an insane sigh of relief, it quite literally felt like the world had been taken off our shoulders. Before we felt like there was no way out. We were able to actually see that life was going to start getting better. Even the “negative effects” of bankruptcy did not phase us at this point.
Like I said above, bankruptcy was a great experience for us. There are a couple of reasons as to why we would never want to do it again (if we can avoid it).
After a bankruptcy getting access to quality credit can be rather challenging. Especially in the first 6 months to one year post discharge. What I mean by that is your limits are going to be very low, unless you have some money saved that you can put down for a security deposit, the rewards may not be the best or nonexistent, and the APR and fees may not be favorable either.
It can be very challenging to qualify for cards such as American Express or other “luxury” credit card providers for quite some time following the bankruptcy. While there is no set timeframe for an approval, the more time you’ve had since your bankruptcy the higher your chances of approval may be.
From my experience, it can be extremely difficult, if not impossible, to get credit from lenders that you included in your bankruptcy. I did a pre approval for one card that I had pre bankruptcy, and I got denied and the reason stated “Status of Prior Account.” I have not tried again, nor have I tried with any other credit cards that I included but I imagine it may be nearly impossible to qualify for those lenders as long as the bankruptcy is on your credit report. For chapter 7 bankruptcy it stays on for 10 years, and a chapter 13 stays on for 7.
Getting secured loans such as cars and houses may be easier and more favorable since they are more regulated. However, in order to qualify for semi decent rates you need to put in some work to rebuild your credit. In my opinion this means at least 6 months of not carrying a balance, paying off in full each month and making sure to never miss your due date.
I was able to rebuild my credit enough that 10 months after my discharge I bought a brand new car. The rate was under 5%, there was no down payment requirement and I did not have to provide pay stubs or bank statements as proof of income. This was made possible by me having extreme discipline, I never carried a balance, I limited my hard inquiries and I made sure to never pay late across all of my accounts.
Even though my bankruptcy process was seamless and easy there was still work that needed to be done on my end that was rather challenging. It took a lot to get all of the required documents together. This was mainly due to the fact that I was extremely disorganized at that point in my life. Getting my bank statements for my attorney was the biggest challenge and headache. Once that was over it was smooth sailing.
Getting out of debt is a very personal decision. Debt can have many different consequences besides just financial. It can have negative implications on your health and social life as well. I have first hand experienced all of these negative side effects. At Ascend our mission is to help people get out of debt cheaper, faster and easier. We want to get you back to living a normal life, a life where your debt is not always at the forefront of your brain.
There are many ways to get out of debt. There are:
Chapter 7 Bankruptcy
Chapter 13 bankruptcy, and other alternatives as well