Your health deteriorates and medical bills build up. The stock market drops and your retirement nest egg disappears. Your employer downsizes and you get laid off. Your family experiences the death of the “bread winner”. Any number of life events could precipitate the need to declare bankruptcy. Feeling upset and nervous about filing is normal but rest assured that you are not alone. Nearly 1.3 million Americans and American businesses filed for bankruptcy in 2012. Historically, many famous people and companies have filed for bankruptcy and gone on to achieve success in their respective fields. President Abraham Lincoln, Author Mark Twain, Automobile Manufacturer Henry Ford, Hall of Famer Johnny Unitas and TV Personality Larry King to name just a few who have experienced bankruptcy seeing it as a fresh start rather than a disastrous ending.
To some, having to declare bankruptcy seems to constitute the ultimate failure. But the event does not have to be the end of the world. . . instead think of it as the beginning of a financially stable future. While some assume that a bankruptcy filing means the person can’t resist the temptation of credit cards (and in some cases, it may), most people who will file for bankruptcy do so for other reasons that are beyond their control. It does not mean that you won’t get back on your feet. The ultimate purpose of bankruptcy is to reestablish your life and finances.
Many people worry about things like “What will the neighbors think?” or “What will it mean for my credit?” While filing papers for bankruptcy is a public document, it is not something that is printed in the local papers or something that you need to tell your employers about. In fact many people you know may also have had the need to declare bankruptcy, you just didn’t know it!
While your credit will be impacted there are some things that Lita Epstein, author of The Complete Idiot’s Guide to Personal Bankruptcy thinks you should keep in mind. People who file bankruptcy are often surprised by how quickly they’ll start getting credit card offers in the mail again. Epstein says offers for secured credit cards (which require a deposit to the bank) with a low limit can arrive within a month of the debt discharge. She recommends that those coming out of bankruptcy get a secured credit card and start making regular, on-time payments to rebuild their credit. “Usually about six to 12 months into it you can get a regular credit card and drop the secured credit card, since the secured card can be expensive.”