So, you are sitting at home wondering about your debt right? You are wondering how it is that end the end of each paycheck you have no money left. By the time you make minimum payments on your credit cards and other expenses that’s it- money all gone. This is especially true if you have fallen into the pay day loan trap. I have been there myself when I was in college. You sell your soul to get a few bucks today but what you pay back is far more than you borrowed- it makes you physically sick just thinking about it. So many of us like to bury our heads and sort of ignore the 800 pound gorilla sitting in the middle of the room right? The thinking goes if we ignore it, we maybe able to wish it away. But, it does not go away.
So what do you do when you have 10k or more in credit card debt and pay day loans and you are starting to make your rent payments late? You start seriously looking at options to get debt relief.
Bankruptcy relief goes back to the founding of America. Heck, Thomas Jefferson filed bankruptcy several times. Sometimes, it is easier to just rip the band-aid off and start fresh.
Here are the top three reasons why you should File Chapter 7 Bankruptcy in Minneapolis.
1) YOU GET A FRESH START NOW!I know what you are thinking. Shouldn’t I try debt consolidation first? No, you should not and here is why. Do you know what happens to your credit score when you stop paying your credit cards when they come due?
The answer is your credit score falls off a cliff. Plus, when you advertise to the world you are in financial distress, by doing debt consolidation, don’t you think that will lower your credit score? It sure will- and by a lot.
But you say, yeah, but I would like to make payments back to my creditors. Oh, I understand that, but let me ask you a question- If you had a choice between buying groceries and feeding your family or making a credit card payment what would you do? You see, we all want to pay our bills, but if you force me to choose between paying creditors and protecting my family, protecting my family is what I will do- it is what I am obligated to do.
Filing Chapter 7 Bankruptcy is called a “fresh start” bankruptcy because you get a fresh start right away. You don’t suffer for years in a debt consolidation program payment that you struggle to make for years.
Instead, your unsecured debts get wiped out after a 4 month process and they are wiped out forever, tax free! Relief from your debts in a chapter 7 bankruptcy is nearly instantaneous because as soon as the bankruptcy is filed, the “automatic stay” provisions of section 362 of the Bankruptcy Code bar creditors from doing most anything to collect on pre-petition debts.
To be able to File Chapter 7 Bankruptcy is an amazing gift when you think about it. It gives us all a lever we can pull, a distress button if you will, we can immediately push in case of an emergency which will keep all creditors at bay and relieve us from our overwhelming debt.
There is simply no other vehicle you can use to get your life back as quick as a chapter 7 bankruptcy. Many people try debt consolidation plans only to end up filing a chapter 7 bankruptcy anyway. I can’t tell you the number of people whose number one regret is waiting so long to file chapter 7 bankruptcy.
I have yet to have someone regret filing but they always regret waiting so long to file. I suspect that is human nature at work. No one wants to file the “b” word. But once you get past the word bankruptcy, life is so much better. Maybe we should call chapter 7 bankruptcy simply “debt reset” so it doesn’t carry those silly and scary connotations with it.
I feel terrible for people who suffer so long before they seek relief. Life is short- suffering sucks. I don’t mind problems, and you shouldn’t either- that is part of life. But, what I do need and demand are solutions to problems. Solutions that actually solve the problem for good. The solution to a debt problem for most people suffering with debt problems in Minneapolis is Filing Chapter 7 Bankruptcy.
2) FILE CHAPTER 7 BANKRUPTCY TO IMPROVE YOUR CREDIT
You are not reading this wrong- it really does say File Chapter 7 Bankruptcy and improve your credit. How can this be you ask? I thought bankruptcy was horrible on your credit and you would not be able to get credit again in your life time right? WRONG!
Here is the simple realty. Yes, bankruptcy is a negative credit event on your credit report. However, most people’s credit score actually goes up. Why? How is that even consistent right? Well, when you get rid of debt, your credit report shows you have no debt, and when you have no debt, your credit score increases.
The simple reality for most people we meet is their credit score is already suffering. If you have bill collectors coming after you, judgments against you, or you are late on any payments, the reality is your credit score is already suffering- so what is the difference? Most people who file bankruptcy improve their credit position because you go from debt to no debt.
We even meet with people who are current on everything and their credit scores are really high, say 750. But these people still can’t get a loan or other credit. Why? Their debt to income is way off. Banks don’t want to lend money to you if they believe there is a reasonable to strong chance you cannot pay it back. Makes sense doesn’t it? Now, if you file a bankruptcy and get rid of the debt there is a strong chance that same bank will lend you money. Well, shimber me timbers- crazy uh? Yes, it is crazy- but it’s also true.
So all of the fears people have how about how bankruptcy affects their credit is misplaced. The reality is getting rid of debt is always a positive on your credit score regardless of how you get rid of it. I always tell people banks don’t care if you pay other creditors back, the banks care are you going to pay me back- that’s it. It’s cynical but true.
So, if you are facing overwhelming debt, odds are the best way to improve your credit position is to get rid of the debt and move on. Have you ever seen banks or dealerships advertise to those who filed bankruptcy? Their ads read something like “FILED BANKRUPTCY? NO PROBLEMS”. Why do they solicit people who filed bankruptcy? They do it because getting people who filed bankruptcy credit is easier because they have no debt.
Now, I am not saying you will not pay a higher interest rate for credit for a short time after bankruptcy- you might. But, the chances of getting the credit is higher too. Instead of being bogged down in debt, with crappy credit, and no end to the misery in sight, chapter 7 bankruptcy allows for you to move on quickly and get your life back.
If bankruptcy was good enough for Thomas Jefferson to file several times, it is good enough for those of you in Minneapolis, MN too.
3) IMPROVES MENTAL/PHYSICAL HEALTH
Let’s face it, overwhelming debt is stressful. Stress has proven to be bad on your physical and mental health. I have relatives that have told me they have ulcers from worrying so much about their debt troubles. I have many client with heart troubles and other physical ailments their doctors would link back to- too much stress.
Mental health is even a bigger problem for those suffering from overwhelming debt. Mental health professionals will tell you that stress has a pronounced affect on ones’ mental health. The clients we see with depression, anxiety, and much worse is quite staggering.
Unfortunately, for many, the weight of overwhelming debt is so crushing on your sense of self worth is draining both physically and mentally. For many, the embarrassment, the sense of losing it all, and lack of control over the situation is too much!
Let me ask you a question- when you go to the doctor’s office, like we all have, and you have an infection in an embarrassing location to you, do you think the doctor finds it embarrassing? No- she does not. It’s just an infection that needs to be cleared up and she has to choose the right medication for you to take. Now, maybe the medication tastes like crap, but you take it because you know it will clear up the infection and you can get on with your life.
The same can be said for debt and we bankruptcy professionals. We do not find overwhelming debt to be very interesting or embarrassing. We see people for generally one of five reasons that are not real interesting:
1) Business failure: Most business fail by definition- that is not interesting.
2) Income drop: the plant closes down: that is not interesting.
3) Medical problems: how can you help that: not interesting.
4) Divorce/relationship breakup: part of human nature: not interesting.
5) Bad financial decisions: we all make them: not interesting.
Do you get my point? Oh the humility of being alive. We were born to live and make mistakes and be human. This sense that some people take advantage of the bankruptcy system by living large and then filing is complete bullshit. No one does this. When they come to meet with us, they have exhausted every idea and they definitely have not been living the dream- far from it.
We never have people say they regret filing a chapter 7 bankruptcy. But, we do have people have one regret. Our clients only regret is waiting too long to file the chapter 7 bankruptcy. They all wished they would not have delayed the decision so long and suffered needlessly. Don’t let this be you. If you are suffering from overwhelming debt, learn from all of our former clients biggest regret- don’t wait too long to seek help.
Sometimes, you do have to take the bitter medicine to get to the sweet spot in life. The medicine doesn’t always taste good- but if you knew it would clear up the problem, wouldn’t you take the medicine?
And there you have it- Everything You Need To Know About Chapter 7 Bankruptcy. You get a fresh start, your credit improves, and it improves your mental and physical health. After all, we do live in one of the healthiest states in the union!
The sooner you start, the sooner you too can enjoy life without the stress of overwhelming debt. Some of the proudest moments of my practice comes from clients who tell us what taking this medicine has done for them, how they have their lives back, and they are so much happier.
Human nature is a fickle sort of thing- we delay what is the best thing for us to do so that you can suffer through long periods of turmoil knowing you need to do something about it but put off the needed solution until you can no longer take it. Sound good to you? NOT!
I am always impressed by those people who don’t delay taking the medicine, recognize they need to do something now, and just do it. I am not sure that person would be me, but I like to think it would be. In the end, these are the people who suffer the least and get their lives back the soonest and go on living happy, healthy, debt free lives. Gee, is that not what we all desire anyway? Go forth, find your solutions, and when you do, act on them, so you too can get your life back today, not tomorrow or next month or years from now.
Kain & Scott, P.A.
100 South 5th Street #1900
Minneapolis, MN 55402