Coping with the realization that you have to file bankruptcy is not any easy thing to do. You realize how limited you are when it comes to a tight financial situation. Nonetheless, it is possible for you to continue getting the things you need (e.g. a home loan or an automobile loan) even if you have a very low credit score.
Knowledge is power when you’re considering bankrupcy; there are many websites available to help you. The United States DoJ along with other private and nonprofit organizations all have insightful knowledge. The more you know, you can be confident you are choosing the right thing and that you are taking the right road to make sure your bankruptcy proceeds as easily as possible.
It should go without saying, but refrain from lying in your bankruptcy filings. Do not try to shield some assets or income from your creditors. This can get you in serious trouble and prevent your bankruptcy petition altogether.
Be sure to remind your lawyer if it seems that some details of your situation are forgotten. It is wrong to assume that your lawyer will remember every word you ever utter! This is your future in their hands, so don’t be scared to mention it.
Unsecured Credit
It can be difficult to obtain unsecured credit once you have filed for bankruptcy. If this happens to you, think about applying for a couple of secured credit cards. This will show people that you are serious about getting your credit record back in order. Then, in time, it may be possible for you to obtain an unsecured credit card.
Safeguard your home. There are many options available to help protect you from losing your home. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. You can also investigate your state’s homestead exemption, an option that might enable you to keep your home if certain financial requirements are met.
Understand the differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. Do some research about these options so you can choose the best one. Do not hesitate to have your lawyer explain any details that seem difficult to grasp. This will help ensure you make the right choice when filing.
Investigate other alternatives before resorting to bankruptcy. For example, you can always talk with a lawyer to see about different options through creditors or other means that will not require wiping the entire slate clean. For example, if you are in talks of foreclosure, you could use a modified loan to overcome your debt. There are a lot of ways that your lender can assist you, such as reducing interest rates, eliminating late fees, or extending the term of your loan. When all is said and done, the creditors want their money, so sometimes it’s best to deal with a repayment plan than with a bankruptcy debtor.
Chapter 7 Bankruptcy
If you have a co-debtor, consider the ramifications that filing a Chapter 7 bankruptcy will have. Once you file for Chapter 7 bankruptcy protection, you no longer have legal responsibility for debts that you and any co-signers originally agreed to. But, bear in mind, the debt now becomes the sole responsibility of your co-debtor.
Prior to filing for bankruptcy, purge from your vocabulary the word “shame”. A lot of people have a negative opinion of bankruptcy, mostly because they misunderstand this procedure. Although dealing with a bankruptcy is stressful, try to focus on the positive. Remembering to stay positive as you go through financial difficulties is a great way to deal with your bankruptcy filing.
Be sure you know the bankruptcy laws before you think about filing. Did you know that in some areas, you cannot transfer assets from yourself to another person in the year previous to filing occurring? Also, a person cannot legally increase their debt amount on credit cards prior to filing.
Take a look at all of your financial options before filing for personal bankruptcy. One good option might be credit counseling. There are a number of companies that will assist you, many of which are non-profit. They will work with your creditors to get your payments lowered and your interest lowered as wll. Often, they make the payments to your creditors, and you make your payment to them.
If you know that you are about to file for bankruptcy, don’t exploit the information asymmetry and get huge cash advances on your credit cards. This is fraud, and even if your other debts are discharged, you will have to pay the money back.
Credit Card
A lot of individuals who have found themselves filing for bankruptcy think that they will never borrow money or use a credit card again. This isn’t necessarily a good strategy to follow since establishing good credit goes hand-in-hand with getting, and handling, credit in a responsible manner. If you aren’t using any credit, then it will be very difficult to get your credit score high enough to be able to purchase things like a car or home in the future. One credit card is adequate to begin rebuilding your credit rating.
With time, things will get better credit-wise for you, despite your having previously filed for bankruptcy. When creditors can look at your credit report and see that you have made an effort, over time, to pay on time, getting credit will become easier again. Eventually, you will be able to brush every bit of that dirt off of your shoulders and once again be able to live a normal, credit-driven life if you so choose.