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What you need to know about bankruptcy

Any adult may need to file for bankruptcy protections, no matter how carefully they managed their finances. Life can take unexpected turns at any point. If you’re considering filing for bankruptcy in your 20s, it may be because of unexpected medical bills or job loss. Maybe you resorted to credit cards when you couldn’t pay the bills, and now the balance is impossible to pay off. Whatever the reason is, take a deep breath, and know that there will be brighter days ahead. Your bankruptcy lawyer can help you get back on track.

Knowing What to Expect from Court

The prospect of going to court can be intimidating, especially if you’ve had no prior exposure to legal proceedings. In all likelihood, you’ll only have to go to court once, and it won’t be in front of a judge. The meeting of creditors, also known as the 341 meeting, is conducted by the bankruptcy trustee. The trustee verifies your identity and financial information. You’ll be under oath when you answer these questions. Your creditors may appear, and will have the opportunity to ask you questions about your finances. In many cases, however, creditors don’t bother showing up.

Identifying the Long-Term Effects

Debtors in their 20s are often concerned about the long-term effects of bankruptcy on their finances. After all, you’re just barely starting out in life. The last thing you want is for your finances to be derailed for another 10 years. Although bankruptcy does remain on your credit history for a while, and will affect anything that requires credit, the good news is that filing for bankruptcy can actually improve your financial future. You can start recovering your credit trustworthiness right away, without the burden of debts you can’t pay.

Recovering Your Financial Stability

Your bankruptcy attorney will let you know what to expect from life after bankruptcy. Consider it an important life lesson, and moving forward, take steps to increase your emergency savings fund, cut expenses, stick to a budget, and keep debt under tight control. Smart money management will help you rebuild your credit score faster than you might think.

The bankruptcy lawyers at Cutler & Associates, Ltd. have years of experience guiding clients through the legal process. We’ll handle the details for you, and let you focus on your financial recovery. Individuals near Schaumburg or Skokie can give us a call at (847) 282-4899 to schedule an initial consult.