n the last 20 years, most Americans have gotten very complacent with the use of credit. People nowadays, don’t save up for vacations, automobiles, clothes and even household items. Why save up when you can put it on plastic. Individuals have a tendency to spend more than they can afford and figure they can just pay for it at later time. This is the reason that so many people are in the situation of having to make the decision to file for bankruptcy. The decision to file Chapter 7 or Chapter 13 bankruptcy should be well thought out as the stigma from bankruptcy follows a person via their credit report for up to 10 years. After filing for bankruptcy, credit will be virtually shut down for some time. No longer will an individual be able to buy all the luxuries they enjoyed in the past. It’s hard for some to understand why their credit privileges were cut off because of the bankruptcy filing.
People filing for bankruptcy should first take a serious look at their life’s choices. Making mistakes one time is acceptable, and learning from those mistakes is imperative. Before filing it would be wise to see a financial advisor and take a look at the entire financial picture. The decision to file should be done with much thought, and avoided if possible, because of the toll it takes on your personal credit.
The two reasons that Congress created personal bankruptcy was to give creditors a fair chance recovering debt that is owed to them, and to give individuals a fresh start by discharging all their debt. Bankruptcy no longer carries the mark of shame, as it did in the past, but it still is a very emotionally draining process. The topic of filing for bankruptcy is obviously not a favorite subject of conversation. But when it comes to getting out from being buried under a mountain of debt, the topic of personal bankruptcy can be very exhilarating. When you have dug such a deep hole and you feel there is no way out, filing for bankruptcy could be your answer.
Going through personal bankruptcy can be psychologically exhausting. So it’s important to take the steps to make it as easy on yourself as possible. Before filing bankruptcy individuals should set some goals on how to become debt-free. The first step would be to make a budget. Take a look at your income and compare it to your current spending habits, as this is an eye-opener for most individuals.
Next, out of the spending habits, evaluate the difference between your wants and your needs and start cutting. Make sure all of your early goals are easy to accomplish so you don’t get discouraged. Keep everything written down that you want to accomplish to make sure you are following your plan. Making all the cuts to unnecessary items will help you get back on track much faster. Doing this, along with filing personal bankruptcy, should put you back up to speed in a few years. Removing the stress of debt can give you a new lease on life and a new attitude about spending.