How To Rebuild Your Credit After Filing Bankruptcy

People often shudder at the mention of the word bankruptcy. Growing debt loads combined with continuous family obligations can cause an incredible financial strain. If this applies to you, or if you are worried about it happening, this article can help.

Credit Card

Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. Should the tax be dischargeable, the debt is often dischargeable as well. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.

If you are going through a bankruptcy do not fall victim to guilt and pay off debts that you do not need to pay. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. You may need to withdraw some funds from your savings account, but don’t take everything that is there as you will be bereft of any financial backup if you do.

Unsecured Credit

After filing for bankruptcy, you may have difficulty getting approved for unsecured credit. If this happens to you, think about applying for a couple of secured credit cards. This will show other people that you’re serious when it comes to having your credit record in order. After a time, you are going to be able to have unsecured credit cards too.

Do not give up hope. Once bankruptcy has been filed, you may be able to regain possession of items such as electronic goods or cars that were taken away from you. You may be able to recover repossessed property if the repossession occurred fewer than 90 days ago. Get the advice of a qualified attorney who can advise you about ways to accomplish this.

Do what you can to keep your home. Filing for bankruptcy will not always result in losing your home. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. You are still going to want to check into homestead exemption either way just in case.

Although the entire process can be stressful, do not allow the stress to take over. Many people who undergo this process become way too stressed out. Stress easily leads to depression, if you are not maintaining control of your emotions. Once your petition is in the hands of the judge, all you can do is wait.

If you decide to file for bankruptcy, it’s important that you’re educated about your rights. You might hear from your creditors that your debts cannot be canceled through bankruptcy. Only a small number of debts are not dischargeable, including student loans and child support obligations. If you are unsure about specific types of debt, check the bankruptcy laws in your state or consult an attorney.

Don’t take out big cash advances from any of your credit cards prior to filing for bankruptcy, taking advantage of the fact that those debts will later be erased. Doing so constitutes fraud. You can easily be ordered to repay all of this money, by the courts.

If you plan to pay debts off before you file for bankruptcy, be careful. There are bankruptcy laws which forbid repayment of some creditors within three months before filing. In the case of family members, this period of time may extend to a full year. Study applicable regulations prior to making any financial choices.

Don’t put off handling the research or procedures for the bankruptcy process if that is the route you’re taking. It might seem a little scary, but if you wait forever to act, you’ll just be waiting that much longer once you do ultimately file. Making use of a bankruptcy pro immediately can make the difference in success and failure in bankruptcy court.

Make wise decisions when choosing a lawyer. This type of law is a popular attraction for inexperienced newcomers. Try to get a lawyer that has a lot of experience and one that is properly licensed. By researching online you can check out a lawyer’s credentials, as well as customer reviews and any disciplinary action against him or her.

Anyone who is wary of filing for bankruptcy has probably heard how frightening the process can be. That said, the best antidote to fear is information, and this article has given you that in spades. Utilize these tips immediately to improve your financial situation.