Life After Bankruptcy
Filing for bankruptcy can feel like you have hit rock bottom in a financial sense. People who consider discharging their debts through bankruptcy often wonder, “What does life after bankruptcy look like?” While bankruptcy can give you a fresh start financially and can result in you living debt-free, it comes with consequences and challenges.
Mr. Alster, a Hackensack bankruptcy attorney at The Law Office of Marc G. Alster, understands the stress and uncertainty that comes with post-bankruptcy life. As part of his practice, Mr. Alster offers personal attention and support to each client and provides post-bankruptcy care as part of the package.
Creditor Harassment After Bankruptcy
Creditor harassment refers to the actions of a creditor who continues to contact you for repayment despite the fact that you declared bankruptcy. These actions can include repeated phone calls, threatening letters, or even attempts to sue you for debts that have been discharged.
An automatic stay is one of the most notable benefits of bankruptcy. When you file for bankruptcy, an automatic stay comes into effect and acts as a shield against creditor collection efforts. This stay remains in place until your bankruptcy case is closed, dismissed, or a discharge is granted.
Once your debts are discharged, a discharge injunction replaces the automatic stay. This injunction permanently forbids creditors from collecting on the specified debts. Any attempt to do so is a violation of federal law.
Sometimes, creditors are unaware of your bankruptcy discharge, which is why sending a written notice to the creditor informing them of your bankruptcy status and the discharge of your debt may be enough to put an end to their harassment. Include copies of relevant documents such as the notice of the automatic stay or the discharge order.
Your bankruptcy attorney can also send a cease-and-desist letter to the creditor, demanding that all contact cease immediately. If the creditor persists despite all efforts, you may have grounds to file a lawsuit for contempt of court.
Recovering Financially After Bankruptcy
Whether you file under Chapter 7 or Chapter 13, bankruptcy is not the end of the world. Instead, it marks the beginning of a new chapter filled with unique challenges and opportunities. If you've recently faced bankruptcy, you're not alone. Many individuals have walked this path and emerged stronger and more financially savvy. Here are some practical tips that could help keep you on the right path financially after bankruptcy:
Save your bankruptcy paperwork. Once a bankruptcy is over, many people are tempted to throw away all the paperwork related to bankruptcy and forget about it as if it was some bad dream. Understandably, any reminder of your past financial struggles may be unpleasant, but don’t toss the documents into garbage just yet. You may need to provide your bankruptcy paperwork in several instances. For example, you may get a call or email from a creditor or collection agency after your bankruptcy is complete asking you for proof that your debt was discharged. You may also be requested to present bankruptcy-related documents when applying for a mortgage loan or other credit accounts.
Keep looking at your credit reports. After bankruptcy, looking at your credit report may not be the most satisfying thing you can do. However, it is not uncommon for people who file for bankruptcy to find errors on their credit reports. Incorrect information – such as having debt that was discharged – could have a negative impact on your credit score and unnecessarily increase the time it takes to rebuild it. Monitor your credit reports and check for errors. If you spot any, dispute the erroneous information with the credit reporting company. Note: Your Chapter 7 and Chapter 13 filings will show up in your credit report for 10 and seven years, respectively.
Start saving money. After you have just been through bankruptcy, the last thing you want is to end up in a financially precarious situation again. Opening a savings account and depositing money regularly is a good financial habit that provides stability and security in the event of any emergencies. For example, if you lose your job, having savings tucked away can help you avoid incurring debt and, depending on how much you have saved, it may be enough to make sure you stay financially afloat before you find another job. No matter how small, any contribution to your savings account is better than nothing if those deposits are regular.
Pay your bills on time. Make it a priority to always pay your existing and new bills on time, as this is vital to repairing your credit after filing for bankruptcy. This step alone can positively impact your credit history and gradually boost your creditworthiness. Late payments usually have the biggest impact on your credit when they show up on your report.
Maintain your job and home. Stability is a major factor in credit scoring after bankruptcy, which is why having a steady stream of income is so important. In the eyes of lenders, gaps in your employment history or seeing that you switch jobs frequently can make you look high-risk. Consistently living in the same residence also demonstrates that you are a reliable borrower.
Life after bankruptcy comes with its fair share of challenges, but it's also an opportunity to start afresh. Ready to take the next step in your financial recovery? Reach out to The Law Office of Marc G. Alster to get guidance on your journey to achieving lasting financial stability.
Get Trusted Guidance for Your Bankruptcy
As a bankruptcy attorney, Mr. Alster has represented people struggling with burdensome debt for over 30 years. The founding attorney at The Law Office of Marc G. Alster assists clients with filing for bankruptcy and provides advice on rebuilding credit and managing finances post-bankruptcy.
Mr. Alster doesn’t just file the paperwork for you – he guides you through each step of this journey. With an office in Hackensack, New Jersey, the attorney serves clients throughout central and northern counties in the state. Call Mr. Alster’s office to schedule a meeting and discuss your situation.