Bankruptcy is often misunderstood and accompanied by a negative stigma. However, bankruptcy can mean different things to different types of entities. For example, a business filing for bankruptcy is often seen as a healing process, allowing the company to reorganize and restructure its debts, while continuing its operations.
Oftentimes, credit counselors and debt relief services will advise against bankruptcy to steer consumers toward their services of financial assistance, postponing the inevitable. Banks and personal finance gurus manipulate consumers into believing that it is impossible to rebuild your credit after bankruptcy.
The reality is that most consumers who have filed for bankruptcy have access to more “new lines of credit” than those who continue struggling with insurmountable debt. This was proven in a study conducted by the Federal Reserve Bank of New York. The study focused on the financial lives of people who continue struggling with debt and those who opted for bankruptcy.
The study revealed that those individuals who filed for bankruptcy early in the year opened a larger number of unsecured accounts than those who chose not to file for bankruptcy. The study proves that filing for bankruptcy opens doors to new lines of credit rather than closing them.
The study also revealed that those who filed for bankruptcy saw a greater improvement in their credit scores than those who did not. Also, those who did not file for bankruptcy lost a significant amount of retirement income, compared to those who did file for bankruptcy. Under federal law, most retirement accounts are fully exempt in bankruptcy.
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If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.