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Getting over your anxiety about filing bankruptcy

Filing bankruptcy is a big step in your financial life, one of the most important decisions you will ever make. You may have preconceived notions about filing that lead you to wonder how good an idea it is.

If you are waffling, perhaps you should look at the possibility of bankruptcy in a new light. Here are a few facts that may help ease your anxiety and give you more impetus to make a decision.

Keeping assets

You may worry that you will lose everything you have, but that is not true. You will likely keep many of your possessions, including your home. For example, the majority of Chapter 7 bankruptcies are no-asset cases in which possessions are not given up. Your attorney will help structure exemptions, which amount to certain basic assets. Furthermore, after the exemptions, your creditors may not be interested in acquiring the assets that fall outside this category.

About losing face

Do not think of yourself as a failure if you choose to file bankruptcy. Consider that many filings are the result of issues such as loss of employment, stagnant wages, huge medical bills, divorce and other logical debt problems. Bankruptcy is the financial remedy for such issues for many people.

The good news about credit

It is true that once you file bankruptcy, you will pay higher interest rates for up to 10 years and have limited ability to get credit. However, your credit score will probably improve much more quickly than you anticipated. According to a report from the Federal Reserve Bank, the average credit score of people who filed Chapter 7 in 2010 was 538.2 on the Equifax scale. However, after the finalization of the bankruptcies, the average score rose to 620. The usual timeframe for this turn-around was six to eight months.

You have options

There are several different options for filing, in particular Chapter 7, 11 or 13. Additional research and consulting with an attorney can help you decide the best choice for your circumstances. The more you know, the easier it will be for you to conquer your anxiety and start down the road to a brighter financial future.


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Schwartz Bankruptcy Law Center

Office Locations:

Louisville Office
3339 Taylorsville Road
Louisville, KY 40205

Phone: 502-785-8549
Phone: 502-485-9200
Fax: 502-485-9220
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New Albany Office
501 State Street
New Albany, Indiana 47150

Phone: 502-785-8549
Phone: 812-945-9200
Fax: 502-485-9220
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