Many people considering filing for bankruptcy worry more about what their future will be like after. In many cases, debtors take a look at the negatives before they consider the positives of bankruptcy. If they’re even considering filing, obviously their finances are a wreck. If you consider that 1.6 million people in 2010 alone filed for bankruptcy, it can’t be that bad. The main benefit of filing bankruptcy is the discharge. In a chapter 7 bankruptcy all unsecured debts are completely wiped out. This is pretty powerful when considering that the average American has about $20,000 in credit card debts. Trying to pay down $20,000 in credit card debt can be quite a task unless you make a ton of money. Most credit card interest rates range from 21 to 26% nowadays. With just that fact alone, interest on $20,000 is about $5000 a year. So just to pay the minimum payment that debtor will have to come up with $500 a month with not even paying anything down on the balance. With living expenses being so high these days, it’s no wonder that people are running to find out about filing bankruptcy.
One of the most frequently asked questions of those considering bankruptcy is, what will be like? Just considering the benefits of filing bankruptcy the term debt free comes to mind. Although, it’s not guaranteed that a debtor will be debt-free after filing bankruptcy, but depending on their situation if they don’t have any secured debts that they are hanging onto, there is a good chance that will be a perk. Most bankruptcy filers also worry about not having credit cards. Sometimes it can be very freeing to live in a cash only, pay-as-you-go lifestyle. It’s not long after the bankruptcy discharge when many creditors start chasing post-bankruptcy filers. Creditors know that the people can’t file again for eight years and just have eliminated all their debt. If the debtor is gainfully employed, many creditors feel these people are a good risk. Those post-bankruptcy filing should be very cautious getting in debt shortly after the discharge. Many times, interest rates are higher than usual and could get the debtor in trouble easily. Life after bankruptcy isn’t so bad if you heed the advice of your bankruptcy attorney and stay out of debt for as long as you can.