Bankruptcy can be a process of letting go. You have to wait for the courts to make major decisions about what will happen in your future. You have to let go of your preconceived notions about who files for bankruptcy or what it means about you as a person.
Beyond that, you will find that certain daily parts of your life disappear when you file for bankruptcy. Learning a bit more about how filing for bankruptcy will affect your daily life can make it easier if you decide if it is right for you.
Your panic every time the phone rings
Collection calls are the worst. They can make you feel terrible every time your phone rings. If you file for bankruptcy, the automatic stay puts an end to collection activity, which means that you won’t have any more phone calls demanding that you pay them.
The fear that every knock at the door is a process server
Once you fall a few weeks behind on payments, creditors start to become interested in. If you go more than a few months without paying anything at all, they might take legal action against you.
If a company has already told you that they will file a civil suit to recoup their losses, you may worry every time you hear a knock on your door that it is someone there to provide you with court paperwork for a pending lawsuit. Collection activity and pending lawsuits alike must cease when you file for bankruptcy.
Insecurities about your house and vehicle
Worrying about losing your transportation or home may loom large during times of financial hardship. Falling behind on a car loan or mortgage could mean repossession or foreclosure.
Filing for bankruptcy can temporarily delay companies that you owe money to from their attempt to reclaim the collateral for those loans. In some bankruptcy filings, like Chapter 13 proceedings, you may be able to renegotiate the terms of those loans to make it easier for you to repay them.
One thing you won’t lose is the ability to use credit
Some people wrongly think that they can’t use credit cards or get a mortgage again after they file for bankruptcy. Other people think that they will have to wait until the bankruptcy comes off of their credit report before they can purchase a home or really move on with their lives. You may be able to qualify for certain credit offers within weeks of your bankruptcy discharge. The more time passes, the less of an impact the filing will have on your creditworthiness.
The truth is that bankruptcy takes away a lot of things that decrease your quality of life right now and doesn’t demand that you sacrifice all of your property or your future credit to do so.