Education Back to Basics: Life After Bankruptcy

by Jack Morrison on September 30, 2011

As September comes to an end, we’re wrapping up our “Back to Basics” education series by discussing a very important topic: Life After Bankruptcy. In case you missed any of our other topics on understanding the foundation of bankruptcy, you can catch them here:

  1. Chapter 7
  2. Chapter 13
  3. Reaffirmation

Now let’s explore our next topic. 

Life After Bankruptcy in Massachusetts
If you’re deep in debt and haven’t yet gone through a bankruptcy, it’s difficult to imagine coming out on the other side intact. But not only do you survive bankruptcy, you’ll feel a huge weight lift off your shoulders. Starting on the road to debt recovery is like being underwater for too long and then coming up to the surface to take that much-needed gulp of fresh air. 

Contrary to popular belief, bankruptcy is not an end, but a beginning. Most of the time when clients come to me, as a Worcester bankruptcy lawyer, they’re experiencing overwhelming financial debt. Their major concerns are stopping the harassing phone calls, relieving stress and making the decision to proactively move on with their lives. Trust me: your life doesn’t have to stay in the hell it’s in now.

The primary thing bankruptcy does is permanently eliminate your responsibility to pay the debt listed in your bankruptcy petition. We call that a fresh start, meaning that hopefully after completing a bankruptcy, you’re able to afford the little expense you need in order to survive: food, shelter and clothing.

The best way to look at completing your bankruptcy is to say you’re starting your financial life over again. 

Think of yourself as being 18 again. What would you do to establish your credit? There are a number of things you can do after bankruptcy. Here’s one proven method:

 Establish and obtain a secured loan. Most credit unions will allow a $500 deposit into a credit union under a passbook savings account. Use this as collateral and ask them for a $500 loan. The passbook acts as collateral for the $500.00 loan. Most credit unions will give you the loan, even though you’ve just filed Bankruptcy and received your discharge. When you get the $500 cash, open up a checking account and deposit the money into that account. Set up the new checking account to have automatic monthly payments on the new loan. It’s all automated.

What this does is re-establish your credit. Every month that you pay on time, the credit union sends a notice to credit bureaus stating that payments were made timely. When paid in full, you get the $500 back, and you’ve improved your credit. 

For a list of additional credit-improving methods, click here.

Are you interested in resolving debt and talking to someone about your situation? Then you might want to sit down with a knowledgeable Worcester bankruptcy lawyer. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

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