Overcoming Emotional Barriers in a Gray Bankruptcy

Overall, the biggest emotional barriers in these cases may be bankruptcy phobia. Many debtors, especially debtors over 55 (gray bankruptcy), have an irrational fear of bankruptcy. This legitimate and debilitating condition often prevents people from seeking the financial help they need and deserve.

A Chicago bankruptcy lawyer is more than an advocate. A lawyer is also a counsellor that people can talk to about their financial issues. After such a conversation, distressed debtors over 55 clearly see the benefits of bankruptcy, such as the Automatic Stay and debt discharge. Bankruptcy isn’t always the answer to financial problems, but it should always be in the conversation.

I’m Independent and I Don’t Need Government Help

Many people over 55 look forward to cashing their first Social Security checks and receiving their Medicare cards in the mail. Furthermore, every spring, these individuals claim all tax credits and deductions they’re eligible for. Bankruptcy, a government-sponsored debt relief program, is no different.

Consumer bankruptcy addresses needs in all three of these areas. After bankruptcy discharges credit card and other unsecured debt, people have more money to spend elsewhere. The discharge order also applies to medical bills the debtor can’t afford to pay.

Bankruptcy is a legal process that includes a number of hidden loopholes and exemptions. A Chicago bankruptcy lawyer is an adviser that helps debtors take full advantage of all available loopholes and exclusions.

If I File Bankruptcy, I’ll Lose My Stuff

This idea is partially true. Most debtors lose all their nonexempt assets when they file bankruptcy. But most people don’t have nonexempt assets. Written exemptions in Illinois include:

• House,
• Motor vehicle,
• Retirement account,
• Personal property, and
• Government benefits.

Additionally, the aforementioned loopholes and exclusions expand the written exemptions. A real estate joint tenancy agreement is a good example. This legal tool bypasses the equity cap in the Illinois homestead exemption.

Assume Joe and Mary live in a large, paid-for house. Before he files bankruptcy, Joe makes Mary a joint tenant in the home. Creditors cannot seize the assets of one person (Mary) to pay the debts of another person (Joe).

Everyone Will Know I Filed Bankruptcy

Once again, this misconception is partially true. Bankruptcy filings, like most other court filings, are public record. Although the information is out there, most likely, no one will care.

Bankruptcy Ruins My Credit Score

Bankruptcy filings lower credit scores. But in many cases, the adverse effect isn’t as bad as many people think it is. Furthermore, most people file bankruptcy as a last resort. Therefore, repeated charge-offs, late payments, and other negative information have already “ruined” their credit scores.

Surprisingly, bankruptcy often has a positive effect on a credit score. People who file bankruptcy did something to address their debt problems. Repossessions and other such negative entries usually mean the debtor quit.

I’m Afraid of What Happens Next

This fear is really a fear of loss of control. Once again, bankruptcy has the opposite effect. Chapter 7 and Chapter 13 give debtors the tools to regain control over their own financial futures by giving them fresh starts.

Connect With a Thorough Cook County Lawyer

No matter what kind of financial problem you are having, there’s a way out. For a confidential consultation with an experienced bankruptcy attorney in Chicago, contact the Bentz Holguin Law Firm, LLC. The sooner you reach out to us, the sooner we start working for you.

Source:

templelawreview.org/article/82-2_skeel/