Recovering from Bankruptcy

Bankruptcy is not something to recovery from. It is something to take advantage of.

For the properly executed bankruptcy, the debtor (the person who files) is fully aware of everything that will happen in his bankruptcy before he files. If something will be lost, he will know about it and prepare for it; if there is a chance that he could lose his discharge, he will have discussed it with his lawyer; if there are tax issues, creditor location issues, outstanding lawsuits or other issues, he will have already discussed them with his lawyer and prepared for them.

Once he obtains the discharge (normally around 90 days from the date of filing), he will be free of all dischargeable debt, and his "recovery" will be how to take advantage of it.

Generally one thinks of recovery as rebuilding credit following a bankruptcy. But the purpose of bankruptcy is to place one's self in a position where credit is not necessary.

The goal is to utilize the bankruptcy to place one's self in the position of living debt free. And that can be very difficult when one begins with no debt, because eventually credit cards will start showing up and the temptations and necessities of living beyond one's income arrive.

It can be done. Each case is different, but the key is actually in the bankruptcy itself. Because each bankruptcy contains a budget. The budget must balance and the budget in the bankruptcy is the budget without the debt.

All one need do is to follow through with the budget -- or perhaps even tighter in order to save for the unexpected expenses to come.

Thus, one does not recover from bankruptcy. Bankruptcy is the recovery.