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The following guest post is provided courtesy of

Of course, no one wants to go bankrupt.  But unforeseen circumstances can drive the best of people into dire economic conditions, and, at times, declaring bankruptcy can be the best option.  It is estimated that roughly 60% of bankruptcies are largely affected by medical bills and illness.  If you have suffered through the loss of a job, a home, or unexpected wage freezes or cuts during the recession of the last two years, and if this has forced you to consider bankruptcy, consider these facts before moving forward.

Your Credit Score Can Be Rebuilt

Many folks who are forced into bankruptcy due to extraneous reasons such as massive medical bills tend to think that their credit will never be able to be repaired.  This is simply not true.  Of course, your credit will take a major short term hit, but with steady discipline and dedication, you can rebuild your score.

You Could Get To Keep Your Home

One of the most common mis-perceptions about bankruptcy, especially among those that are forced into it through events completely out of their own control, is that they will lose everything and be forced to live on the street!  This is simply not true.  In both Chapter 7 and Chapter 13 bankruptcy, it is possible to keep your primary residence.  This will depend on several factors, including the amount of equity in the home, the value of the home, etc.

Keep Paying Your Bills

Once you filed bankruptcy proceedings, you will most likely stop receiving bills, calls, and notices from creditors.  This, however, does not mean you are released from the debt obligation.  Remember to keep paying your bills.  If you are filing Chapter 7 bankruptcy, make sure you keep paying the bills for what you want to keep, ie the car, house, etc.

Be Careful About Moving Money

When you file, you will be required to disclose all the money and assets you have sold, transferred, or given away during the previous two years.  Some people will attempt to give thousands of dollars of cash loans to a relative so they do not have to lose it to the courts during the proceeding.  Then, as soon as the proceeding is over, they can get the money back from their relatives.  This is a criminal offense.  Make sure you consult with an attorney when making any transfers of cash or assets prior to bankruptcy filing.

Although bankruptcy is something we all want to avoid, the truth is that bad things can happen to good people.  If events outside of your control have forced you to consider bankruptcy, be encouraged that it is always possible to rebuild your finances.