For many of us, the word “bankruptcy,” immediately evokes a room-full of guys in fancy ties, running around, screaming “I am ruined!” and jumping from the Empire State Building. And, even though you have nothing to do with those guys, you also feel like screaming your lungs out because your minimum monthly payments are eating up a good portion of your paycheck, your credit is maxed out and your credit card applications get declined because your credit rating had fell crashing through the floor and stayed there forever.
You might have a job, but, really, what’s the point of keeping it, if all the money earned goes to the credit card companies. But you are afraid to quit because, if you stop paying them, they’ll start calling you and your family threatening to sue. That’s what already happened a few times you had to miss a payment – once because of that vacation and the other time, because of that car accident – you’re still receiving hospital bills for that – bills that you can’t pay. The hospital’s billing department has been calling for months, by the way. Add to that your student loans and hiding in a cave in Afghanistan suddenly becomes an attractive option.
Bankruptcy might actually offer you an escape from that ferry-wheel of interest rates and monthly payments. There are different ways to go bankrupt – but the one you will grow to love is called “Chapter 7.” In a Chapter 7 Bankruptcy, two important things happen. Number one: your debt gets discharged. Number two (a.k.a. the “other side of the coin”): everything that you own gets taken away and sold to pay back your creditors. That other side of the coin might sound pretty harsh, but fortunately, the law contains many, many exceptions to that rule – all these exceptions basically ensure that no one will take your personal possessions and sometimes even your car and your house. But – your collection of modern art, your villa in Tuscany and your slave army of French chefs will be confiscated. What was that? You don’t possess even a single piece of modern art? What a shame! But, on the other hand, now you won’t have to worry about your belongings getting taken away.
Finally, after you file your Chapter 7 petition in Bankruptcy Court, you will have to appear before a judge – a bankruptcy trustee. The trustee will make sure that you are trying to hide a family fortune from him (and your creditors), and, once he is sure, he will enter an order discharging all your debt. Well, not all – student loans “survive” the bankruptcy, which means, you would still be responsible for them. But, all your credit cards, veterinarian and grocery bills, auto loans and medical bills will go away. The trustee doesn’t make his order final for a few months – just in case you happen to win lottery or receive a large inheritance. However, once the bankruptcy order becomes final, your ailing rich uncle can finally kick the bucket – your debt will still remain discharged.
Now you can finally take those skiing lessons you’ve always wanted to take, go for a vacation or maybe even start saving. You will be able to get new credit cards eventually – quite soon actually – credit card companies prefer somebody fresh coming out of bankruptcy to someone who’s never declared Chapter 7 before. That’s because one can only do a Chapter 7 Bankruptcy once every 10 years. So, don’t repeat the same mistake again – remember, you won’t be able to get rid of your new creditors for quite a while. So, before whipping out that credit card, stop and think how much better it feels without those monthly payments. Try and keep that feeling for as long as you can.
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If you live in New York or New Jersey and are thinking about bankruptcy, drop me a line – our law office helped hundreds of people discharge their debt. Once your debt is discharged and you are ready to start anew, read about ways to make money in this hilarious guide – GetRichandQuick.com.
