How To Rebuild Your Credit After Filing Bankruptcy

When you decide to file for personal bankruptcy, it is a very serious decision that should not be entered into lightly. Read through the information in this article and use it to help you make an informed decision. Then, you can make a decision based on what you learn.

It can be difficult to obtain unsecured credit once you have filed for bankruptcy. In this event, you should attempt to apply for a secured card or two. If you pay what you owe back promptly at all times, you can show that you are taking steps to be responsible about your payments and credit rating. Unsecured credit may be offered to you quicker than you think after doing so.

You should not have to pay for a consultation with a bankruptcy attorney. Make sure you ask lots of questions. Seek free consultations from a handful of lawyers, before deciding which one to hire. Only make a decision after you have met with several attorneys and all of your concerns and questions have been addressed. You can think about your decision before making a commitment. You can take your time and check out several attorneys before making your final selection.

It is imperative that you retain an experienced attorney if you are planning to file bankruptcy. The topic of bankruptcy is a complicated one and it is important that you know all about it. A bankruptcy attorney can help yo,u and make certain you can do things the right way.

Chapter 13 Bankruptcy

Make sure that you understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. If Chapter 7 is what you file, your debts will get eliminated entirely. You will be removed from any contracts you have with your creditors. With a chapter 13 bankruptcy, a 60 month period of time will be established in which you will repay the as much of your debt as possible. Following the 60 month period of time, the remainder of your debt will be excused. To make the wisest choice, you will need to understand the consequences of each of these two options.

Always protect your house. Bankruptcy filings don’t necessarily have to end in the loss of your home. You could keep your home; it depends on your home’s value or if a second mortgage is on your home. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.

Bankruptcy can be a good time to spend time with people you love. Going through a bankruptcy is never easy. This long and stressful process can leave a person feeling guilt ridden, unworthy and ashamed. Many people tend to hide until their process is completed. However, becoming a hermit will only increase feelings of self-doubt and could make you depressed. So, it is critical that you spend what quality hours you can with loved ones, regardless of your financial circumstances.

Look into all of your options before you choose to file for 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. A plan that can be useful when foreclosure is looming is a loan modification. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.

Chapter 7

Before filing for bankruptcy under Chapter 7, make sure that you consider the implications this will have on any of your co-debtor, who are usually family members, close friends or business associates. Debts which you shared with another will not be your responsibility any longer if you file for personal bankruptcy under Chapter 7. Sadly, this will not be the case for your co debtor. Your creditors may simply turn their attention to your hapless acquaintance.

Know your rights when filing for bankruptcy. Collectors may try to convince you that your debt can’t be discharged. What you can’t file on is very small, like student loans or child support payments. If a collector tells you your debt won’t be discharged in your bankruptcy and you know that it will, report the collector to the attorney general’s office in your state.

Bankruptcy laws are very exact and very important, so ensure that you’re well aware of all current laws before you file a petition. For example, it is forbidden for an individual to transfer any assets away from the name of the filer within the twelve months preceding filing. Also, it is against the law for a person to acquire more debt on their credit card prior to filing.

As you can probably see, filing bankruptcy does not happen quickly or easily. When you file for bankruptcy, things must be done the right way. By following the above advice, you will make fewer mistakes and find yourself better prepared.

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