While the circumstances surround a bankruptcy aren't typically cause for rejoicing, there are ways you benefit and things to look forward to. Especially with the start of a new year, you can redefine yourself, financially, leading to less stress, lower debt and, at long last, some optimism in your life.
1. You Come Clean
Living under a mountain of debt, trying to balance your frail finances, and hiding the dire circumstances from others and yourself is quite a burden to bear. After filing for bankruptcy, you should feel a sense of relief, given that everything will be out in the open, clearly defined, and restructured to terms you can actually live with.
2. You Keep What You Need
Missing a mortgage payment leaves you feeling as if you're about to be homeless; however, with the exemptions you file during bankruptcy your home and other necessities, such as any vehicles you need to get to work, remain in your possession. Not having to worry about your home being taken by the bank should be a huge relief, making it easier for you to focus on rebuilding your financial life.
3. You Choose Your Future
While bankruptcy is complicated, it can really simplify your life. With the advice of a bankruptcy lawyer, you decide which chapter is right for you, allowing you to choose how your money matters unfold in the future:
- Chapter 7 calls for the liquidation of most of your assets, excluding necessities, with the proceeds paid to your creditors and any remaining unsecured debt discharged.
- Chapter 11 may benefit you most if you're a business owner, allowing you to restructure debt, discharge certain aspects of it and still keep your company going.
- Chapter 13 reorganizes the money you owe, extending the time you have to pay it, lowering the overall amount, and permitting you to retain personal property.
You must be able to demonstrate your ability to repay if opting for Chapter 13 and to qualify for Chapter 7, you'll need to show that you really can't pay creditors. It's a lot to think about with both short and long-term ramifications, but, hopefully, you feel like you have some control over the process and are in the position to make the choice yourself, as opposed to circumstances dictating for you.
4. You Get To Start Over
As with the passing of the old year, you can begin to put your unfortunate financial history behind you. Ringing in the new, it's important to be realistic about how you are with money and to set goals or New Year's resolutions, as you push forward:
- Don't oppress yourself with blame, guilt, or feelings of failure, because that will only hold you down.
- Create a workable budget for yourself and adhere to it every month, come what may.
- Take advantage of the counseling that comes with every filing of bankruptcy, to improve your habits, thinking, and financial posture.
- Look at the New Year and life after bankruptcy as blank canvases, upon which you can paint a brighter, more productive and more secure future.
No matter which type of bankruptcy you file, the court expects you to oblige your agreement and become more responsible, which is likely what you expect of yourself. You can do this, no matter how bad you're behaved with money in the past, by exercising self-control, planning for purchases (rather than charging them all), and working with your court-appointed trustee.
While putting debt behind you isn't hard, changing your ways is. Still, with the New Year roaring in, you can ride a wave of change, reinventing yourself along the way and opening up countless doors for you in the future.
For more information, contact a bankruptcy lawyer today.