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Bankruptcy: Is It Really A Second Chance?

You may have heard bankruptcy referred to as a “clean slate” or a “second chance.” Is it really? The answer to that depends on your attitude toward bankruptcy and what you expect it to do. Bankruptcy is:

  • A chance to discharge your debts. The law provides you with a way to legally get rid of your debt and to start over with a clean financial record. If you want to permanently rid yourself of old debt, this is one of the best ways to do so.
  • A way to control your finances. If you simply cannot pay your bills, you can take control of your budget with bankruptcy. By discharging some debts and changing the payment structure of others, you may be able to get a handle on your finances.
  • A second chance to build credit. It may take some time, but bankruptcy provides you a “reset” from which to begin rebuilding your credit. You may also be eligible for new credit targeted specifically for those exiting a bankruptcy plan.

Bankruptcy is not:

  • A way to get out of paying your bills. If you have too much income, the judge will require you to pay off as much of your bills as possible. Additionally, some debts, such as child support or delinquent taxes, may not be dischargeable under bankruptcy.
  • A way to modify your interest rates. While modifying interest rates and payment structures may be a part of some bankruptcies, there may be better and easier ways to do this with your creditors without filing bankruptcy.
  • A quick way to build credit. Those who file bankruptcy can successfully build credit ratings but it takes time. In some cases, your credit rating may be affected for several years after bankruptcy and you may not be eligible for some forms of credit for some time after your discharge.

Simply put, bankruptcy is an answer to financial problems but it is not the only one. It is important for you to have the help you need to understand what bankruptcy can and cannot do for you and make an informed decision about whether you want to file. The attorneys at Oswalt Law Group in Phoenix are ready to help you with your bankruptcy. We have years of experience in evaluating financial issues and determining when bankruptcy will benefit our clients. Call us today to discuss your situation and find out if bankruptcy can benefit you.  

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