“I’ve declared bankruptcy. Now what?”
This is a combination “statement – question” that millions of people have made over the past few years. According to the United States Courts website (HERE), 1,221,091 individuals and companies declared bankruptcy in the U.S. in 2012 alone.
Bankruptcy is an embarrassing, stressful, and humiliating process. It can make one feel like they are not just a financial failure, but a total failure as a person. That’s not true, of course. Many people have made the tough decision to declare bankruptcy (Dave Ramsey is a famous example in the world of personal finance – so grateful he shares about it openly!), and it became a catalytic moment in their life that launched them to an incredible future. This is the very reason the option to declare bankruptcy exists in the first place: to help people recover from extremely difficult financial decisions.
Because bankruptcy affects people so deeply, over a series of posts I’m going to help answer the question: “Now what?” The reason this matters so much to me is because a large percentage of people who declare bankruptcy once are likely to file again! In fact, 28% of the people who filed for bankruptcy in 2011 were “repeat filers.” It is my goal through this series to help bankruptcy filers become adept financial leaders and managers so that they can prosper and never be broke again!
To open this series, here are a few facts about the most common types of bankruptcy one can declare:
- Chapter 7 Bankruptcy Liquidation of one’s assets (minus exempt items)
- Chapter 9 Bankruptcy Municipality bankruptcy
- Chapter 11 Bankruptcy Reorganization under the bankruptcy code
- Chapter 12 Bankruptcy Family farmer or fisherman bankruptcy
- Chapter 13 Bankruptcy Individual debt adjustment
And here are some interesting facts about bankruptcy:
- You can’t erase student loans by filing bankruptcy This is true in almost all cases.
- You can’t erase taxes owed by filing bankruptcy This is true in almost all cases.
- You can’t erase child support or alimony obligations by filing bankruptcy This is true in almost all cases.
- More than HALF of bankruptcies are due to medical bills The failure of our own bodies causes a financial collapse. Awful!
- Filings for bankruptcy have dropped substantially over the past few years (more than 10% each year) Has the economic recession gotten our attention and made us better money managers?
I look forward to this series. Please share your stories and comments as it will help thousands of people who are in this process right now!
Read the entire series (available after 3/25/2013)
The I Was Broke. Now I’m Not. Group Study Kit costs only $20 and can help you avoid bankruptcy and position you to prosper! Check it out HERE.