Do you feel exposed when bankruptcy clients ask about how filing will impact their ability to get credit post bankruptcy?
One of the nice things about having practiced bankruptcy law as long as I have is the ability to draw on the outcomes of many prior cases. For years, I’ve had a patter about credit after bankruptcy, and, in general, life after bankruptcy. Clients imagine that filing bankruptcy will render them credit pariahs for a decade, or a lifetime. I’ve been able to reassure them that it isn’t so.
I no longer use those well worn assurances about how credit plays out in the future for my current clients, since I am uncertain that the credit world going forward will resemble the world as I’ve known it.
For the new bankruptcy lawyer, you can cite to the uniqueness of the financial times we are living through as the reason that you cannot predict the future of the consumer credit world.
Some things, I expect, will remain the same:
- The negative impact of your bankruptcy filing will fade over time
- Credit will be available if you are willing to pay highly inflated interest
- Nothing makes you more credit worthy than steady income and savings in the bank
I try to swing my client’s focus from their credit score to their balance sheet. It’s the balance sheet that reflects their financial strength not the credit score, I repeat.
So, if you’re new at this, and can’t draw on a wealth of prior cases to reassure clients about the future, take heart. None of us know how this present recession will play out. But you can assure your client that they will undoubtedly be better off having filed bankruptcy.
Image of courtesy of Gaspirtz