Get Out From Under Your Debt – How Bankruptcy Can Give You a Fresh Start
Drowning in debt? Bills piling up, wages being garnished, lawsuits looming – it often feels like there’s no way out. Bankruptcy attorney Josh is here to throw you a lifeline.
“Bankruptcy gives people a clean slate when facing large amounts of debt,” Josh explains on the True Law Stories podcast. “It’s a reset, but it’s a fresh start.”
Contrary to popular belief, declaring bankruptcy can empower you to take control of your finances and drastically improve your situation. Here’s how to know if bankruptcy is right for you, myths to stop believing, and stories of people who rebuilt their lives after filing. With the right help, you too can emerge from crippling debt to a stable financial future.
But before we proceed, don’t forget that this episode is brought to you by videocasestory.com. Click here if you need help collecting, crafting, and delivering customer stories.
When to Consider Bankruptcy as an Option
Bankruptcy allows you to wipe the slate clean, stop vicious debt cycles, and start fresh. But how do you know it’s the right path for your situation?
“I think the best time is when they realize you can’t pay all the bills,” Josh advises.
Your Debt-to-Income Ratio Spirals Out of Control
When unsecured debts like credit cards exceed around half your gross annual income, it becomes mathematically impossible to stay current on payments. The high interest rates create a debt snowball.
Lawsuits and Legal Actions Begin
Many people bury their heads in the sand, thinking “It won’t happen to me.” But when the first collections lawsuit arrives, it’s a harsh wake-up call. Use it to explore your options.
Missed Payments Lead to Crippling Interest Hikes
One late payment can cause credit card interest rates to immediately soar from 18% to a whopping 33%. This triggers a vicious cycle of debt.
Monthly Bills Consume All Your Income
Struggling to cover basics like food, rent and utilities on top of debt payments is not sustainable. Being unable to make ends meet is a clear sign it’s time for a change.
Busting Myths: The Truth About Bankruptcy
Mention bankruptcy and a chorus of objections often arises: You’ll never buy a house. Your credit will be ruined for 10 years! You could lose everything!
The stigma surrounding bankruptcy causes many misconceptions. Here are Josh’s top myths he regularly debunks for clients:
- Myth: You’ll Lose Your Home
Reality: In most cases, bankruptcy exemptions allow you to keep your home provided you maintain payments. Letting fears over your house prevent exploring bankruptcy can be financially disastrous.
- Myth: You Won’t Qualify for Credit Again for Years
Reality: Bankruptcy often improves credit initially by eliminating late payments and judgments from your history. Responsible credit use post-bankruptcy means you can rebound quickly.
- Myth: Bankruptcy Means Financial Ruin
Reality: For most people with overwhelming debt, bankruptcy provides a chance to stabilize and become financially healthy again. Don’t let stigma keep you from considering it.
Considering the Downsides
While often life-changing in a positive way, bankruptcy does have some downsides to weigh:
- Your credit score drops initially after filing. But responsible use means you can rebound within 6-12 months in many cases.
- High-income individuals may have to forfeit certain assets. An experienced attorney can advise if bankruptcy is right for your situation.
- Strategic planning is required for major purchases like homes for a period after filing. But options exist.
For most people in insurmountable debt, however, the benefits greatly outweigh these temporary drawbacks. Bankruptcy stops the debt hemorrhaging and opens the door to reconstruction.
Get a Fresh Start for Your Finances
If debt feels inescapable no matter how hard you work, it may be time to talk to a bankruptcy lawyer. An expert can review your unique financial situation and clearly explain whether bankruptcy may help provide the fresh start you need.
With the slate wiped clean, you can take control of your finances again. Many see income growth, credit improvement, and overall increased stability after taking this empowering step. You do not need to live in debt’s shadow forever – there is a way forward.
Watch the full episode now, and make sure to leave any questions or comments you have about the episode.