Far too many Americans struggle with debt. While some of this debt is due to out of control spending, in many instances, it is caused by an unexpected event, such as the onset of a medical condition or the losing of a job. Many people who wind up in this position struggle to try to dig themselves out of the hole, but the financial obligations often prove overwhelming. Bankruptcy provides these individuals with a very real debt relief option. However, many Texans find themselves wondering how it will affect them and their financial health in the future.
While it is true that pursuing Chapter 7 or Chapter 13 bankruptcy will generally have a negative impact on one’s credit score, it does not doom one to an eternal life of financial struggle. It’s quite the opposite, actually. Bankruptcy can provide an individual with the fresh financial start he or she needs to get back on his or her feet. Then, that individual can focus on rebuilding his or her credit.
How does this work? There are a number of ways. To start, individuals should focus on building an emergency fund so that any unexpected bills or income losses can be covered. Then, a tight budget should be drafted and adhered to. Utilizing a secured credit card, which is much easier to do than securing an unsecured credit card, can also allow an individual to quickly rebuild his or her credit. From there, individuals should focus on paying all of their bills on time and saving as much as possible. By doing this, an individual can emerge from bankruptcy and secure the financial stability they need and deserve.
All of this is to say that the impact of bankruptcy on one’s credit shouldn’t scare an individual away from this debt relief option. After all, trying to stay afloat can lead to missed payments to creditors and collection actions that can be just as damaging to one’s credit. Bankruptcy is a legal protection afforded to the American people so that those who have found themselves in an unfortunate situation can secure a second chance. Everyone deserves that. An attorney experienced in the field of bankruptcy can help these individuals navigate the process so that they can come out better off on the other side.