Is Bankruptcy Really a Fresh Start?
The ideas are in bankruptcy have had a roller coaster experience over the last two decades. Initially, with a high rise of people filing for bankruptcy through the 90s, it had a load through the early 2000, before spiking again in 2005 and then another lull until the 2009 recession. After 2010 we know that bankruptcy filings dropped reliably year after year. We don’t know what that’s going to look like when the information on bankruptcy filings come in for 2020.
What we do know is that the public perception of bankruptcy has changed. In the 1990s, it was the final attempt to get out of overwhelming debt, which made it impossible the coordinate day-to-day living. In 2005 bankruptcy was seen as the only way to get out of tons of debt that was a mass in the early 2000s when the economy wasn’t excellent but wasn’t completely falling apart. With newer Generations emerging into older financial management stages, many people are looking at it as a fresh start.
Understanding What You’ll Have to Start With
Many people, especially those who are younger when filing, have concerns about their credit score and how much they still have to live on after filing for bankruptcy. With younger Generations more worried about their credit score, they can take a bit of a breath. The factors of filing for chapter 7 don’t impact credit scores as much as they used to.
Now, a high credit score can drop by 200 points or more in unfortunate situations. Those situations might be filing for more drastic forms of bankruptcy and already having your credit history impacted by overwhelming debt. Not all bankruptcy filings have an equal impact on credit score. Rebuilding your credit is part of the process of recovering from a bankruptcy.
When it comes to the financial means you have to make your fresh start with, Arizona is rather strict. An individual may only have a $300 and $600 for married couples. The Arizona exemption laws don’t allow for much more than a person needs to start rebuilding.
Legal Guidance to File Correctly
Filing for bankruptcy, usually, chapter 7, can truly be a fresh start for individuals and families. It could be the chance to start without tens of thousands in credit card debt, without medical expenses, and with a manageable plan for loans that you can’t remove through bankruptcy. However, for bankruptcy to be useful as a fresh start, you need to have an attorney to help you make a plan for what happened after bankruptcy.
The 6 to 12 months that follow filing for bankruptcy must be strategically planned out. Strange things like coming into an inheritance in a six-month time frame after the bankruptcy can destroy the entire process. It’s also possible that you could file for chapter 7 and still end up with debt if you had continued to use credit cards or make luxury purchases. Working with an Arizona bankruptcy law attorney will help you understand what you should or shouldn’t do while preparing to file, and how to manage any outstanding debt you do have after you file.