Many people who need debt relief are afraid to file for Chapter 7 or Chapter 13 because they fear that life after bankruptcy will be difficult. The fear is that bankruptcy will prevent them from getting new credit cards, buying a car, buying a house. Some even believe that they won’t be able to freely travel in and out of the country after bankruptcy. Or, the bankruptcy may affect their immigration status. All of these fears are baseless. The fact is that life after bankruptcy is great! Whether or not you believe that life is great after bankruptcy doesn’t change the fact that it is great. If I were to tell you that Hawaii is beautiful, that it’s like paradise, but you have not been there, it’s going to be hard for you to believe that Hawaii is indeed a beautiful place.

First, bankruptcy is confidential. Nobody knows about it unless you tell everybody about it. In most bankruptcy cases, debtor keeps everything that he owns because he is able to exempt them under applicable bankruptcy law. Most debtors keep their houses, cars, furniture, retirement accounts, and everything else that they own when they file for bankruptcy. There is no sign on your door that says you filed for bankruptcy. 

Second, many successful people have filed for bankruptcy to obtain a fresh start in life without accumulated debt. For instance, Walt Disney filed for Chapter 7 twice before his Disney empire became a global success; Star Wars Edge of the Galaxy, anyone? Milton Hershey filed for Chapter 7 before he became the biggest Chocolate business in the world; Reese’s Pieces, anyone? President Trump’s businesses filed for bankruptcy four times in the nineties. Yet, he is president of the United States of America since 2016.

Third, the sole purpose of bankruptcy is to give the debtor a fresh start in life without the burden of accumulated debt and to make the debtor productive again. Just imagine having $50K of credit card debt. You need $1500 a month to keep them current. That’s $18K a year, $36K year two, and $90k by year 5. In other words, debtor would have paid out $90K in 5 years to keep $50K of credit cards current, but guess what? He still owes the same $50K in year 5 after paying in $90K to keep them current. Debtors in this situation are like hamsters in a wheel. They keep on working and running in the wheel but don’t go anywhere because they are no longer productive. Bankruptcy allows them to wipe out the $50K, start fresh without the $50K, so they can be productive people again. In this example, debtor will save $1500 a month, and in 5 years will save $90K. With these savings, he can buy stocks or invest in real estate. Buy a house. Invest his money wisely. Then the $90K will keep on growing until it becomes $1.0M! Then debtor becomes a millionaire! And if debtor is as smart as Walt Disney and Milton Hershey, he can become a billionaire! No kidding. This is true.

Fourth, rebuilding credit score is fast and easy after bankruptcy! As soon as you get the discharge order, and want to buy a Camry, for instance. Just walk into any Toyota dealership but make sure you bring your discharge order because they will ask for a copy of it. Let’s say you got your discharge order today. Bring it to any Toyota dealership tomorrow and they will finance the purchase of your car of choice. Of course, your interest rate will be higher than normal. But if you wait a year or 2 after your discharge to buy the car, your interest will be much lower. The point is, you can re-establish credit very fast as soon as you get your discharge. In 3 years, you can buy a house. Many lenders will provide you with a mortgage to buy a house in year 3. In 6 months from discharge, you will be getting new credit cards preapproved sent to you in the mail. Yes, you will get new credit cards, no problem. There are banks that specialize in giving people who have filed bankruptcy new credit cards because they can’t file another bankruptcy for another 8 years. There’s a reason for everything under the sun, right? There’s a time to be born, a time to die, a time to sow and a time to harvest…Ecclesiastes 3:1-11.

Fifth, there’s no restriction on setting up new businesses after bankruptcy. Neither is there any restriction on travelling in and out of the United States. Debtors who file for bankruptcy can freely set up new businesses like Walt Disney and Milton Hershey after bankruptcy. It’s a fresh start in life without accumulated debt. Let’s say you file for Chapter 7 today and you have to travel to Greenland next week to assure Greenlanders that they don’t have to sell themselves to the United States. Can you do that? Sure you can.

Sixth, bankruptcy does not affect your immigration status in any way, shape or form. To get your green card, if your income is not enough, you need a sponsor with enough income to qualify you for permanent residency. If you have enough income and don’t need a sponsor, the fact that you filed for bankruptcy doesn’t affect your qualification for permanent residency. Bankruptcy law prohibits the Federal government from discriminating against someone who has filed for bankruptcy. I have many clients in the process of getting green cards or citizenship in the last 30 years.  None of them have been affected negatively by their bankruptcy filing. They are all permanent residents or naturalized citizens now. This fear that bankruptcy will affect immigration status is purely psychological and has no basis in fact or law.

So take it from the lives of Walt Disney and Milton Hershey, life after bankruptcy is great, beautiful and productive! Indeed life after bankruptcy is prosperous and abundant! From Chapter 7, Walt Disney and Milton Hershey became, billionaires with global businesses, literally true!

“…A TIME TO BE BORN, A TIME TO DIE; A TIME TO PLANT, AND A TIME TO PLUC UP THAT WHICH IS PLANTED…” ECCLESIASTES 3:1-8

Lawrence B. Yang is a graduate of Georgetown University with a Master’s Degree in Law and specializes in Bankruptcy, Business, Real Estate and Civil Litigation.  He speaks English, Mandarin and Fujian and has successfully represented thousands of clients in California, including companies overseas.  Please call Angie, Barbara or Jess at (626) 284-1142 for an appointment at 20274 Carrey Road, Walnut, CA 91789 or 1000 S. Fremont Ave., Mailstop 58, Building A-10 South-Level Level Suite 10042, Alhambra, CA 91803.