Summer of Possibilities: Part two in our 3-part Series
In my book, How To Tame The Student Loan Dragon (Amazon), I wrote and Ode to Bankruptcy and here it is for you:
Ode To Bankruptcy
I don’t understand why you’re so attached to your credit score. I am here to give you freedom from debt and so much more. I can ease you from the shame and guilt. With me, you will get financially rebuilt. Don’t sweat the threat of debt. After your debts are gone, you’ll feel better, I bet. I know you’re not a deadbeat. I’ve seen your balance sheet. You’ll take a couple classes just like the masses. You’ll also meet the trustee. When that meeting’s over, you’ll really feel free. We might even discuss your student loans. I’m feeling really good about eliminating debts created from life’s little clones. When it comes to your budget, I say let’s judge it! Put fences around your expenses and Never forget how you got out of debt.
Now that we all realize that I should keep my lawyer job rather than try my hand at poetry, let’s talk about what you don’t know about bankruptcy that might just make you feel better about your decisions.
Bankruptcy actually improves your credit score. You see, when you eliminate the debt-to-credit-line ratio, your balance moves to $0.00 and that very change will improve your credit score from the moment you file for bankruptcy. This is what makes bankruptcy such a powerful tool compared to debt settlement, which does not improve credit.
There are No Taxes on debts discharged in Bankruptcy. When you get a bankruptcy discharge on your debts, you will not owe any income taxes. Again, in the debt settlement realm, you could end up paying taxes on that cancelled debt and you still won’t improve your credit score.
You can have a debt consolidation and repayment plan in Bankruptcy too. If you can afford to make payments, but you don’t have enough money to pay everyone back and live, then consider a Chapter 13 bankruptcy case your dream plan. A chapter 13 bankruptcy is a 5-year payment plan where you pay back some or all of your debts based upon many factors, but we can guide you in this process to see if this will help you gain control over your monthly budget and give you a plan that could benefit you.
You can Keep Your Home and Your Car and still file for Bankruptcy. We have the ability to protect certain assets from being taken by the bankruptcy trustee. Here in California we use the California Code of Civil Procedure 703 or 704 sections to protect your assets. Sometimes, when you have something to lose in bankruptcy, discussing whether to file under Chapter 7 or Chapter 13 is a beneficial conversation.
YOU WILL GET CREDIT AFTER BANKRUPTCY. If you didn’t already know, I am a product of my own service. I’ve been through bankruptcy and got my own discharge back in 2012. I’m a millionaire now and doing my very best to get myself ready for retirement. I don’t say that to brag, but rather to tell you there is life after bankruptcy and that I tell you from personal experience that you will get credit after bankruptcy. My bankers have told me and I can confirm that within 5 years after your discharge, you’ll be back on normal, standard credit and you can buy homes and cars too! Seriously, the creditors will want you back and will try to do everything they can to trap you in debt again. Your job, stay vigilant.
YOU CAN BUY A CAR OR HOME AFTER BANKRUPTCY. Just in case you missed it, you will be able to not only get credit, but you will be sold whatever the lenders will allow. The hardest part of buying a home will be your saving for that down payment. So, this tells you that you need to shift your focus from getting out of debt to planning and saving for your future as quickly as you can. Time is still money you know.
You Cannot Afford To Have a Credit Card For Emergencies! The reason is that you don’t control the credit line, the bank does. Did you see that Wells Fargo just shut down all credit lines? I remember back in 2008 the banks did that just before the crash. Don’t think for one minute that your credit line is an emergency protection when you don’t have any control over whether that bank decides to shut it down. That’s why you need CASH reserves up to at least 6 months if more. You control the cash, while the bank controls the credit line.
Do your own research here and take in all facts and then make a well-informed decision about the direction that is right for you. Please let us know if you have any questions or concerns as you navigate your way toward a dignified retirement.
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