A Fresh Financial Start

Each year when the New Year rolls over, we all begin to think of New Year’s resolutions and how we want to improve our lives from the previous year. We start to set goals for our future to improve certain aspects of our lives whether it is health, personal hardships, or financial difficulties. We sometimes take a step back and realize life did not take us down the path we were expecting to be on and instead of sitting back and relaxing on a beach somewhere we are stuck with piling personal debts from student loans, credit cards, home foreclosure and are now feeling the sting of bankruptcy. Making the first steps after bankruptcy can sound difficult but you can and will bounce back from it and below are some tips on how to get started.

Let Go of Your Shame and Negativity

When hearing the word “Bankruptcy” we instantly are given such a negative image of this situation. Growing up, we are taught what obligations and responsibilities we have and as adults, we pay our bills no matter the circumstance. Unfortunately, life is never that simple and the honest truth is that it is not always possible to repay all of our debts even when trying our best to do so. If thinking that bankruptcy is your only answer, you are not alone. The fastest growing group of bankruptcy filers is people older in life. A study done in May 2011 by University of Michigan Law School found that 1 in 8 adults in the U.S. which is about 13% of general population have thought about filing for bankruptcy.
Even when people know that bankruptcy is a common practice, people still can’t help but feel guilt and disappointment when filing. The best advice is to turn those negative emotions into a more purposeful thought and think of bankruptcy as a learning experience. Truly take the time and look at what you could have done differently to prevent this situation from occurring. The next step is to accept your failure and free yourself by forgiving your mistakes and start to move on.

Recovering From Foreclosure

Studies done by AARP’s Public Policy Institute shows a record amount of homeowners above the age of 50 that went through foreclosure or at least 90 days or more overdue on house payments from 2007 through 2001. One of the biggest issues after losing your home is a good chance you have probably drained most of your savings as well. Some people may never want to own a home again and are content just renting the rest of their life but one way to bounce back from foreclosure is to start rebuilding your savings account or rainy day funds. These accounts typically have $500- $2000 saved in them. The reason of having this type of account is to help deal with emergency or unexpected expenses like a car or home repair that suddenly needs attention. Without this type of savings, you would be forced to use payment options like credit cards to pay everyday expenses that will in turn make you overuse them and hurt credit even further.

Setting Up an Emergency Fund

An Emergency fund differs from a rainy day mainly by being a larger amount saved in a separate account. This account should accumulate anywhere between $3,000 and $10,000 or above if can afford it. The reason for this larger amount saved is for this fund to assist you longer term if something should occur in a personal dilemma such as losing your job or medical issues arise for example. An emergency fund can also help you in a financial disaster such as a bad business investment or loaning money to a family member that never got repaid. These funds should have enough money saved to be able to keep you afloat for 3 to 6 months by paying all your current bills in that time frame. Of course it will take time and energy to make a savings such as this but is a important goal to have in mind.

Get Help From the Professionals

Investment mistakes whether it is watching your 401(k) change drastically or you invest in a friends/ family’s business that doesn’t make it will always take a toll on your confidence. If you are uncertain and nervous on how to manage your assets, it may be best to consult with someone who specializes in this field like a financial planner. A professional can help evaluate your needs and develop a plan to guide you through your financial plan and set new goals after a setback has occurred.

Repairing your credit after divorce

Divorce’s can be very draining on an emotional standpoint as well as financially. Once the worst part is over, you can start to move on from this set back as well. To start fresh from a financial view, you will first need to reestablish your credit in your own name. You can find where you stand credit wise by obtaining a credit report from three of the credit bureaus- Equifax, Experian and TransUnion. Secondly, it is best to get rid of any joint credit accounts with previous spouse and be sure to pay all new bills on time to sustain your credit rating. Some people may not have very much credit in their own names so it may be a good idea to look into a secured credit card. These types of cards need to be paid cash up front for the credit line. It can be somewhat surprisingly how quickly after filing bankruptcy an bank will allow regular unsecured credit cards mainly because lenders know that a user can not file for bankruptcy protection again for several years.
 Bohikian Law Group specializes in bankruptcy services including chapter 7 and 13 bankruptcy.  More information can be found at https://bohikianlaw.com.

Is Bankruptcy The Solution?

The prospect of declaring bankruptcy is frightening.  Not feeling like you are in complete control over your finances can make you feel like a failure.  When you are in a situation in which you are contemplating the pros and cons of bankruptcy it is important to note that you are in complete control.  Bankruptcy allows individuals to regain control over their finances.  It gives you the ability to start over from scratch. There is no need to live in debilitating debt any longer. 
Bankruptcy can be the solution if you can answer yes to 2 or more of the following questions:

• Are you only making minimum payments on your credit card?
• Do bill collectors call you regularly?
• When you are paying bills or sorting through your finances, do you feel anxious?
• Are you paying for necessities with credit cards?
• Have you considered debt consolidation?
• Do you have any idea to how much you owe?

Accessing Your Financial Situation

Answering yes to two or more of these questions is a sure sign you should give your financial status a bit more thought.  Bankruptcy is a situation where relief is offered when you owe more than you can afford to pay. 
It is important first to review your liquid assets.  This includes checking and savings accounts, retirement funds, stocks, bonds, real estate, college savings accounts, and other bank and non-bank assets.  A rough estimate will do.
The next step is to create a list of your debts including all credit cards, car payments, monthly bills, house payments, and such. Declaring bankruptcy is an option out of a tricky financial situation when your assets are less than your debt.

Steps in Declaring Bankruptcy

There are two ways in which an individual can declare bankruptcy.  The most common method is to voluntary file.  The second is for creditors to ask the court to order an individual bankrupt.  For the best outcome and restart to your financial future consulting with a bankruptcy lawyer is important. An attorney specializing in bankruptcy can determine the best option for your individual circumstances. 

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common option for individuals when filing bankruptcy.  Some of the most common reasons that individuals are forced into bankruptcy include unemployment, medical expenses, overextended credit, and divorce.  Chapter 7 bankruptcy is a straightforward option to settle debts.  In this type of bankruptcy any assets you may have that are considered above and beyond necessary will be liquidated.  The cash from these assets will be liquidated and distributed to your creditors. 

Four months later a discharge will be received.  The bankruptcy will stay on your financial record for the next ten years.  This doesn’t have to mean your financial life is over.  Even with a bankruptcy on your record you can begin to rebuild your credit.  Chapter 7 offers a fresh start to individuals quicker than other bankruptcy options such as Chapter 13. 
If you are experiencing financial hardship take time to schedule a free consultation with Bohikian Law Group.

Bohikian Law Group specializes in bankruptcy services including chapter 7 and 13 bankruptcy.  More information can be found at https://bohikianlaw.com.

How to Recover After Declaring Bankruptcy?

Some of the most responsible people find themselves in financial trouble.  At times these issues becomes so bad that there is simply no way they can get out from under them.  One solution for individuals that find themselves in such a situation is to file bankruptcy. 

Filing for bankruptcy is known to take a toll on individuals both emotionally and financially.  It takes years after filing for bankruptcy for you to rebuild your credit profile.  It is estimated that in 2017 there were upwards of 750,000 bankruptcy filings, not including businesses.  Bankruptcy is a legal action that individuals or businesses can take in order to dismiss a portion or all of an accumulated debt.  It is important to note that this is not done without meeting certain criteria and without consequence.  There are advantages and disadvantages to the bankruptcy process. It is important to understand bankruptcy, how it can impact your financial future, and just how you can survive and thrive after.

Bankruptcy is a legal process that is used to eliminate or lessen the debts that individuals and businesses are responsible for paying.  Due to the complexity of the process it is important that a bankruptcy attorney is hired.  Each bankruptcy is unique and will be evaluated as such.  Courts need to determine what the financial burden is and the ability the individual or business has to pay it. Hiring a bankruptcy lawyer is crucial because of the ramifications it has on your credit, getting new loans, and new credit. 

Bankruptcy is not always a good idea however, for many it can be the only way to achieve financial stability.  Bankruptcy can relieve you from a portion of or all of your debt.  If only a partial portion of your debt is relieved the bankruptcy court will assign a repayment budget for the remaining debt.  Once you have started the bankruptcy proceedings foreclosure on your home, repossession of your car, wage garnishments, utility shut offs, and so forth will cease.  Creditors and collection agencies will no longer be allowed to call you without a fine. 

Each bankruptcy case is unique and requires a one on one evaluation.  Some debts are commonly reduced or dismissed such as credit cards, medical bills, past utility bills, and even sometimes rent.  Others, however, are rarely dismissed through bankruptcy including child support, alimony, taxes, and student loans.  If you are no longer required to pay on your car there is a high probability that it will be repossessed. 

Once the bankruptcy process has been concluded it is time to get back on the saddle.  Let’s face it, we all need credit at one point or another.  Using credit and credit history is how many people buy homes, cars, and larger purchases. Bankruptcy will impact your credit and have a negative effect on your credit report.  You will not be able to get a loan or credit for a while after bankruptcy.  When you do start to accumulate credit again you should expect to pay higher interest rates, increased security deposits, and larger down payments.  When accumulating new credit after bankruptcy it is important to stay within your budget, pay your bills on times, and avoid accumulating debt. 

Filing for bankruptcy is not a decision that should be made without a lot of thought.  If you think you have no way out of your debt it is best to meet with a bankruptcy attorney for a free consultation to determine the pros and cons of this action in regards to your unique situation. 
Bohikian Law Group specializes in bankruptcy services including chapter 7 and 13 bankruptcy.  More information can be found at https://bohikianlaw.com.