"That's been my mindset as I got back on my feet." "I may never again make $108 million but I can have a comfortable lifestyle," he said. "It's important to be cautious and take things on slowly and carefully."įor Walker, rebuilding also meant accepting that his life might look different than it did when he was in the NBA. "There are types of credit you can get, and the key thing is to not immediately take the offers," said Mancini. In addition, after bankruptcy people should be cautious about taking on more debt – while it's important to rebuild credit, it should be done carefully. Then, you must begin to rebuild your finances.Īn important part is having a workable budget and sticking to it, according to Lawless. Regardless of what kind of bankruptcy you choose, the process takes a few years before you're off the hook. "You need to have a CPA, financial advisor, agent, lawyer – these need to be separate but work together," he said. This means surrounding yourself with professionals that can help you be successful. "You have to take responsibility of what you do, and you have to be on top of it." "You are the CEO of your company," he said.
The limits for chapter 13 bankruptcy in 2020 were nearly $420,000 in unsecured debt and roughly $1.25 million in secured debt.īecause everyone's situation is different, it makes sense to work with a bankruptcy lawyer to determine the best course. However, you must fit certain requirements – you need to have enough income to afford your monthly payments, and your debt must be under a certain amount. In chapter 13 bankruptcy, you generally get to keep ownership of your assets and get a more affordable payment plan from your creditors. A court-appointed trustee will handle your case and may sell some of your assets to cover your debts.
In this process, all unsecured debt – think personal loans, credit cards and some medical expenses – is wiped away, but a court will take possession of your assets such as property. Walker was able to file for Chapter 7 bankruptcy, he said, which is also referred to as a liquidation or straight bankruptcy. More from Invest in You: From investing basics to stashing cash, your money questions answered 'There will be billionaires made.' Why one NBA player is all in on crypto Here's an easy way to alleviate some of the anxiety in your life over money Chapter 7 versus Chapter 13 bankruptcyīefore filing for bankruptcy, people need to be aware that there are two different types for consumers – chapter 7 and chapter 13. "Bankruptcy won't put money in your pocket, it forgives past debts." "If you don't see your financial situation improving after bankruptcy it's not a good time to file," said Robert Lawless, a professor at the University of Illinois College of Law.
Generally, in this case it makes sense to already be working your way out of debt. "If you are faced with the loss of either your home, your car or garnishment, any of those events is an emergency and it could make sense to file for bankruptcy immediately," said Sarah Bolling Mancini, an attorney for the National Consumer Law Center.īeyond an emergency, it may make sense to file if you have an overwhelming amount of debt that you won't be able to repay and that it's peaked – meaning that you're not still incurring more debt.
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