Hard times fall on many people, especially in a recession or bad economy. Filing for bankruptcy has been the saving grace for many of these financially frustrated individuals. While filing for bankruptcy can be a huge relief to those in debt, many people feel they don’t know how to explain their bankruptcy to family, creditors and employers. This concern can plague a person post-bankruptcy, when it doesn’t need to. There’s no need to be ashamed of your bankruptcy, and there are ways to be upfront and honest about what happened.
Creditors – Explaining a bankruptcy to a future creditor can be uncomfortable. They want to know you will pay back what you promised and you want them to trust you to do so. This is why honesty is always the best policy; honesty and trustworthiness tend to go hand in hand. The trick to proving yourself is to come prepared. Clean up your credit report by ensuring everything is correct and up-to-date. Make sure you have a steady income for 6 months with pay stubs, it helps show you are responsible and serious about applying for credit. Having a budget and pay plan readily available is another way to show your commitment to them. Most importantly, creditors like to have some kind of collateral. Supplying a 20% down payment shows creditors that you’re financially invested as well.
Employers – Many employers will run background and credit checks on their employees, especially if they have access to company funds. Again, with employers, honesty is always the best policy. Hearing your story and explanation is much more comforting than seeing it pop up on a report. The important thing to keep in mind is that you filed bankruptcy for your family and your future, and you’re being responsible in seeking employment and getting yourself back on track. If possible, work your story into the interview. It doesn’t need to be a “sob story,” you can explain how it empowered you and what you learned from the experience-how it will shape your future decision-making and planning.
Children – Explaining your bankruptcy to family members is tough, but how do you help children understand? First off, do not shut them out. While children may not always understand “adult issues,” they can tell when something is wrong. When explaining bankruptcy to your children, use simple terms. They can usually understand the concept of assets and debts. Don’t go into too much detail or else you can worry them. Let them ask questions, if they want to know more. Most importantly, let them know it’s not their fault and that everything will be ok.
Filing for bankruptcy gives you a chance to start over, it’s nothing to be ashamed of. If you’re considering filing for bankruptcy, please contact a Waco or Killeen bankruptcy lawyer to learn more about your options.
About the Author: Jeff Davis is the Owner of the Davis law firm and a highly experienced Waco and Killeen bankruptcy attorney. To find out more information about a Waco or Killeen bankruptcy lawyer, please visit www.jeffdavislawfirm.com.