Chapter 7 Bankruptcy An Option In This Coronavirus Recessions
I frequently hear people tell me that they are concerned about filing a Chapter 7 bankruptcy because of how it will affect their credit. Here’s the real story: the people who are asking me either have bad credit already or are unable to keep making the monthly payments and will thus soon have bad credit.
The beauty of Chapter 7 bankruptcy is that it gives you a fresh start. In other words, it basically wipes your credit clean. Creditors can no longer report any debt that you have discharged on your credit reports. After your discharge, you can begin building up your credit immediately. You will be able to get credit cards right away – they maybe low limit, secured or have a high interest rate – but if you take out one card and use it carefully (once or twice a month) and stay current with your payments, you can rebuild your credit before you know it. Believe it or not, 2 years after your bankruptcy discharge you can qualify for an FHA mortgage (currently around 3%). Being a real estate closing attorney in addition to a bankruptcy attorney allows me to see the light at the end of the tunnel, as there is little more satisfying for me than assisting one of my former bankruptcy clients in buying a home.
With the onset of the coronavirus, I fear that many small business owners and those in the service and entertainment industries will be put in financial harm and will need to look at options. While bankruptcy isn’t the solution to all financial hardship situations it is always worth the cost of a free consultation with an experienced attorney, right? The coronavirus is knocking us all for a loop but that doesn’t mean you have to stay down on the canvas. If the coronavirus is putting a major strain on your finances, contact us for a free initial Chapter 7 bankruptcy consultation.