Although circumstances leading to bankruptcy may not be positive, life following bankruptcy can be. The whole point is to wipe the slate clean and have a new chance at life. Keep reading to see how bankruptcy can actually give you a new lease on life, rather than function as a permanent financial albatross.
Have a good look around the Internet to see what information is relevant to you regarding bankruptcy. The United States Justice Department, the ABI (American Bankruptcy Institute), as well as the NABCA (National Assoc. Consumer Bankruptcy Attorneys) are excellent sources of information. By being well armed with the correct knowledge, you can be certain of the decision that you have made. Additionally, you will understand the processes necessary to conduct your personal bankruptcy matters in a smooth manner.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. If the tax can be discharged, so can the debt. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
Credit History
Try to make certain you are making the right choice prior to filing your petition. Consider any other options that are available to you, such as consumer credit counseling. Bankruptcy can leave your credit history permanently marked. Prior to doing this you need to be sure you try everything else first to get your credit history into shape and to lessen the impact.
After a bankruptcy, you may not be able to receive any credit cards. If you do, then try applying for a coupe of secured cards. This will show people that you are serious about getting your credit record back in order. If you pay your secured card off on time, you’ll eventually find that companies will start offering you unsecured credit.
Before you file, make sure you understand current bankruptcy laws. The laws are constantly undergoing changes, so you must stay on top of them if you are going to file for personal bankruptcy correctly. To learn how the law has changed recently, go online and check your state’s website, or call the state government and ask them.
If you are making more money than you owe, bankruptcy should not even be an option. Filing for bankruptcy can really damage your credit in the long run, by staying on your report for up to ten years.
Interest Rates
Think about all the choices available to you when you file for bankruptcy. You can get your interest rates reduced or enter into a debt repayment plan. Before you file bankruptcy, ask your attorney if any of these are viable alternatives for you. Look into loan modification plans if you need to deal with an imminent foreclosure. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. Making arrangements with the creditors to make reasonable payments towards you debt is a much better plan than bankruptcy because the lender simply wants the loan repaid.
Rest assured, when you file for Chapter 13 bankruptcy, you still have the ability to take out mortgage and car loans. However, the process of approval is a bit more stringent. You will be required to meet a trustee and be approved for a new loan. You will need to come up with a budget and show that this new loan payment schedule is doable. You’ll also need a valid reason for making the purchase.
As previously stated, the reasons for filing for bankruptcy are not generally a happy fairy tale. On the other hand, the new beginning that bankruptcy offers can lead to a new life story. The truth is, that by using the tips in this piece, it is possible to make bankruptcy a positive experience that gives you the fresh start you need.
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