What Will My Life Be Like After I File Bankruptcy?

by Peter Orville, Binghamton Bankruptcy Lawyer

December 30, 2008

One of the most intimidating aspects of bankruptcy, and one that keeps many people from filing, is the fear of what happens after you file.

The following are some of the many positive outcomes that result from filing for bankruptcy:

  • The phone will stop ringing from collection calls and creditors will stop harassing you. Creditors, who continue to call, write or send bills are violating the law and can be sued for monetary damages.
  • Creditor’s wage garnishments will stop, and the income that you should receive will be yours to keep.
  • Your dischargeable debt will be discharged, allowing you to keep current on other payments, such as rent, mortgage, car payments, utility or other bills.
  • Your credit score will begin to improve.

How can your credit score improve after filing for bankruptcy?It seems impossible. However, in most situations, this is exactly what happens. Most people who file for bankruptcy are behind on their payments or have defaulted on loans or credit cards. Some people owe large sums of money to several creditors who report these debts to the credit reporting agencies. This all shows up on their credit reports.

After you file for bankruptcy, the credit reporting agencies remove the late payments and defaulted loans from your credit report and simply list “included in bankruptcy”. While a bankruptcy will be viewed negatively by those who look at your credit report, it will not make your report substantially worse. Many people who filed bankruptcy have been able to get loans, mortgages and lines of credit soon after they filed with a much-improved credit score from when they first decided to file.

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Peter Orville is a bankruptcy lawyer in Binghamton, located in the Southern Tier of New York. He is a member and New York co-chair of the National Association of Consumer Bankruptcy Attorneys.

Last modified: December 31, 2012