Be Smart If You Have To File For Bankruptcy
No one ever looks forward to filing for bankruptcy, but sometimes, it is the only choice that is left. Despite how embarassing and traumatic this experience can be, you should go through it objectively and with a clear mind. Making any error in this chapter of your life can have a ripple effect you suffer from for years. Use the ideas presented in the following paragraphs to make the best out of this.
Be crystal clear in your specific reasons for filing. Courts and judges do not want spin or sob stories about your personal circumstances. They are going to look at your situation coldly and objectively. Do not try to embellish anything that happened or omit potentially embarrassing facts. Be open and honest in all your dealings.
Take a good look at your credit score before you file. Do some research to find out just how hard you are going to take a hit on this if you file for bankruptcy. It is going to hurt your score for around a decade, so have some idea what this will mean in terms of interest rates you will pay for the next seven or more years. When you tally this up, you might just discover that bankruptcy is not in fact a good idea.
Inform creditors of your circumstances. If you have a serious shot at bankruptcy, some of them will not get their money back as fast as they want. Others will not get it all back, and some will not get anything. You might just discover they are all willing to bend over backwards to make new arrangements with you to spare you bankruptcy.
Certain debts are completely obliterated in bankruptcy. Others are not. The applicable ones vary, depending on laws and circumstances. Credit card debt is often just discharged, but student loans or money owed the government is rarely or never let go. Consider what kinds of debts you have.
Begin hunting for new lenders. Some corners of the financial sector specialize in post-bankruptcy lending. Some are just willing to give a fresh chance, others are willing to take risks on those they know can not file for bankruptcy again for seven years. Your options might be limited, but they are out there. Build new bridges.
Try to get both secured and unsecured credit cards. Secured credit cards are easier to get and can help you rebuild your credit. Unsecured credit card providers might let you know what you can do to get one of their cards down the road to further rebuild your credit.
Stay upbeat. You are doing this because you want a fresh start and clean slate. It might be hard having others stick their noses into your personal finances, but it has to happen.
Is is never easy to swallow one's pride and file for bankruptcy protection. Keep your wits about you and take nothing personally. The highest consideration is to start moving in this direction as soon as you know you have to, so that you can turn the corner and focus on your recovery.
