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A Fresh Start in Life---After Filing Bankruptcy

Filing Bankruptcy is the First Step Towards a Debt-Free Life

For the last 24 years, I have helped nearly 2,000 people throughout Chicagoland file for bankruptcy protection. This protection has shielded my clients from their creditors and offered a path towards financial freedom. Let me describe two clients to demonstrate how bankruptcy protection gave them a fresh start in life.

The first client was struggling with massive credit card debt. Before contacting me he tried everything he could to solve his financial problem because he was always told "never file bankruptcy." So, for years my client postponed getting married and attempted to pay the minimum required payment on his credit cards by reducing his expenses, moving home with his parents, and attempting to work extra jobs. Nothing helped. The interest/finance charge, penalties, and late charges were greater than the amount of money he could afford to pay each month. He was swimming up the financial stream. Finally, out of desperation, he even threw away good money for debt counseling and hired a "debt specialist". Nothing helped. So, my client finally contacted an experienced bankruptcy attorney for solutions.

I was able to eliminate all of his credit card debt. Yes, that's right. All of his debts were gone. He is now debt free! Free to get married, free to move into his own home, free from the hassles and worries of debt collectors and oppressive credit card debts.

The second client had purchased a home in the West suburbs of Chicago. Unfortunately, the home lost significant value caused by the current recession and the downturn in the residential real estate market. In fact, the home had lost so much value that the fair market value of the home was now lower than the amount of the mortgage. At the same time, the interest rate on the mortgage adjusted higher to increase the monthly mortgage payment obligation. The client was stuck: the client could not afford to keep the home but could not sell the home either. All the client wanted is to get rid of the home and buy a new one that was within the client's budget.

I was able to eliminate all of the debt relating to the mortgage obligation, real estate taxes, upkeep, and assessments. The client was able to move to a newer less expensive home that was in line with the client's budget. Now the client is happy and living within the budget and is enjoying a debt-free life.

Rebuilding Your Credit

Some people delay filing bankruptcy because they don't want to hurt their credit and are just looking to borrow more money from "Peter" to pay "Paul". That's a strategy that I have never understood. Borrowing money from one person/company to pay the debt owed to another person/company doesn't help.

For most people, their credit scores have already been significantly damaged because of the massive amount of debt and the late payments or missed payments relating to the massive debt. I believe these people could be better off if they eliminate their debts in total and started saving money. The money saved is the same money that would have otherwise been paid to the credit card and finance companies. Instead, this money should be saved in the bank and then used when needed. Stop making car payments, credit card payments, lease payments, signature loan payments, etc. It's time to get rid of the debts and start putting some money in your pocket and not the creditors' pocket.

Then you can start rebuilding your credit score by assuming small amounts of debt and paying these debts on time and in full. By doing this, you could start rebuilding your credit.

Credit Cards after Bankruptcy

I would urge you to obtain a credit card or two after filng bankruptcy. However, I would strongly caution you about using these credit cards. After bankruptcy you are granted a fresh start in life and are debt-free. Don't squander that opportunity by getting back into debt by leading a life style that is higher than you can afford. Use the credit cards only for emergencies and establishing a repayment history. Charge the card ever so modestly each month and then promptly pay the card in full and on time!

For all other purchases, PAY CASH, PAY CASH, PAY CASH. Get into the habit of paying cash for all purchases. If you cannot afford to pay cash for a product, then don't buy the product. Think about how you lived as a child. If you are now tempted to buy a product that you didn't own as a child, then think about whether you really need that product. If you didn't have a 54" plasma TV as a kid, then maybe you don't need one now. Many people as children didn't have microwave ovens, multiple color TVs, cable TV, mulitple cell phones, etc. Are these really NEEDED or simply LUXURIES that we believe are needed. How did you survive as a kid without them?

It seems like last generation's luxuries are this generation's necessities. Don't fall into that trap. Just look at the last 100 purchases you made by credit card. How many of these purchases were necessities of life: food, clothing, medicine, transportation, and housing? Then ask youself how much of the food and clothing were essentials and how much were small luxuries? Start playing a game with yourself. Next time you are in a store, look in your cart before check out and ask yourself "Do I need to purchase this product?" If the answer is NO, then put it back. For example, ask "do I need that extra bag of cookies, chips, or pop?" None of these are nutricious and all cost money that could be used for meat, fruit and vegetables. Similarly, ask "do I need that third sweater, second pair of boots, or 15th t-shirt with the logo on it? The answer is probably NO.

Free Bankruptcy Consultation

For a free consultation, contact Attorney Robert Schaller by completing the Contact Us form on this web site or calling at 630-655-1233.