Observations from an Omaha Bankruptcy Attorney
Probably the most satisfying part of my job as an Omaha bankruptcy attorney is seeing the stress, anxiety and overall sense of gloom and doom lifted from my clients’ lives. Yes, it really will be OK! How do I know? Because I have witnessed thousands of clients who have filed bankruptcy and I can honestly say that 99.99% of them were very happy that they made the decision to proceed with a bankruptcy case.
Of course, I don’t know of anyone who wants to file bankruptcy, just like I don’t know of anyone who wants to have a root canal. But, there comes a time when the pain is too great or the situation too unreasonable to do nothing.
Although there is always a reason to be concerned about any major decision, what I can report to you is that there is a tomorrow and there are plenty of reasons for optimism regarding the future for individuals and business owners that file a bankruptcy petition. People that have overcome a financial disaster through bankruptcy are able to put the past behind them and to focus on building a better and more secure future for themselves and their families.
BUILDING A NEW FUTURE AFTER BANKRUPTCY
Protecting your family with proper insurance coverage
Commonly, many of the people that I meet with are without critical safety nets to protect themselves and/or their loved ones. For example, most people do not have sufficient life and disability insurance, if at all. And, more and more people do not have any health insurance, not to mention auto insurance. These are extremely important protections to have. Without them, your economic stability is always at risk. The reason always given as to why these basic protections are not in place is that there isn’t any money available to afford them. After bankruptcy, obtaining adequate insurance coverage is a top priority.
Creating an Emergency Fund
This is an obvious thing to do after bankruptcy but it needs to be repeated. Rome wasn’t built in one day and neither will your financial recovery. But, you need to take steps to set aside at least some amount of money each month if at all possible. And, if you do it regularly, it really will be become enjoyable knowing that you have some level of financial independence.
Pay off your mortgage and vehicle loans early
Stop paying interest after bankruptcy! If you can (after obtaining proper insurance and setting aside money for an emergency fund), then start paying down your secured debt faster than you need to. There used to be a time when borrowing money to buy a bigger house or a newer vehicle made some sense to certain people. Bankers and financial advisers would argue that the house, in particular, would always appreciate in value and that inflation would make the money borrowed not seem so bad in the future. That recommendation was always suspect in my mind and now it is downright foolish. The bottom line is that you should get out of debt as soon as is practical and then stay out of debt!
Don’t avoid all future credit, but be careful.
Take on new debt very carefully and with a clear mind. Use credit slowly and try not to pay any interest at all. You can use credit without incurring interest charges by paying off the debt, in full, every month. Monitor your due date deadlines and try and automate all payments online. Over time, your credit will start to improve. However, it is necessary to jump back into the credit market in order to regain a good rating. Avoiding all credit will cause your rating to fall off the radar. But, be careful….and deliberate. Don’t finance something that you truly cannot pay cash for in a short period of time.