Life After Bankruptcy
How life after bankruptcy in Personal Chapter 7 & 13 cases affects options
Following a personal bankruptcy discharge, payments are no longer required. Creditors are legally prohibited from collection efforts with stiff fines provided for violation of court orders. No one is allowed to collect a discharged debt; not even a phone call is allowed. But is personal bankruptcy really over?
Expect all future credit applications to inquire if you filed personal bankruptcy within the last 10 years. Lenders can verify this information easily with the click of a mouse. Debtors will be able to open checking accounts for personal use, but commercial accounts are frequently denied when requested by anyone who received a personal bankruptcy discharge. Personal bankruptcy debtors report many offers for credit cards immediately after a discharge. These cards offers require security and/or the highest interest rates allowed by law. Are the benefits of personal bankruptcy worth the cost? The choice is yours.
Personal bankruptcy provides an ultimate solution
Debtors engaged in business, including corporations, partnerships, and joint ventures, may choose to remain in business and avoid liquidation of assets. Chapter 11 is available for individuals and sole proprietorships as well. Under chapter 11, you may seek adjustment of debts, including reduction of principal and interest, or extending payment schedules or may seek even more comprehensive reorganization. Chapter 11 also allows liquidation. Sole proprietorships may also be eligible for relief under chapter 13.
Also know that many creditors are intimately familiar with the impact of personal bankruptcy. For this reason, astute creditors often agree to voluntary restructuring debts when negotiated by an attorney for the debtor, including waivers, discounting, and voluntary reorganization without court involvement.