Thinking Of Filling For Bankruptcy?
The onset of the economic crises has more and more people thinking of going bankrupt, or filling for bankruptcy.
Some might view going bankrupt as a way of solving all their financial problems and putting an end to debt collectors, bills, and nagging creditors. However, a bankruptcy filling brings its own problems and will affect your ability to get credit for many years.
A bankruptcy filling has nothing to do with being poor or rich. In fact, most people that file for bankruptcy can be considered rich.
Steps for filling for bankruptcy
Before you file for bankruptcy, make sure that you have exhausted all other possible solutions. A bankruptcy is something that stays on your record for many years and will make getting a loan very hard.
You will be required to submit to credit counseling to take sure that you have no other options before being able to go bankrupt.
There are two different type of bankruptcy fillings. You can file for a Chapter 7 or Chapter 13 bankruptcy. Most individuals are required to file a Chapter 13 bankruptcy which entails some form of repayment plan. On the other hand, a Chapter 7 Bankruptcy requires that you liquidate your assets to repay the debt. Under this type of a liquidation no additional payments will be required.
When filling for bankruptcy it is recommended that you use a lawyer.
After filling for bankrupcy an “automatic stay” goes into effect. During this period your creditors or collection agencies can not contact you concerning your debt. Creditors can be held responsible if they contact you during this period. Make sure you report any violations to your lawyer.
After filling for bankruptcy, your next step is to meet with your creditors. Be prepared to list all your assets and debts at this meeting. With the exception of student loans and tax bills, most debt is eligible to be included in a bankruptcy filing.
Under any circumstance should you try to increase your debt prior to filling for bankruptcy. If creditors can prove that you took on debt that you were not intending to pay it can be excluded from the bankruptcy filling
Under Chapter 7, your debts will be discharged about two months later assuming there isn´t a lawsuit challenging a particular debt. If you filled for Chapter 13 you will only receive the notice after the agreed upon repayment period is exhausted.
What to do after going bankrupt
A bankruptcy filling will stay on your credit report for up to ten years, but you should start rebuilding you credit as soon as possible. This will pay-off in the long run.
Paying your monthly bills on time is a good way to start. Remember, some of these bills get reported to credit reporting agencies. Also, don´t apply for too much credit at a time, and don´t use a large portion of any available credit you have.
To rebuild your credit rating you must start by getting credit and paying it off on time. One of the best ways to start rebuilding your credit is by applying for secured credit cards. These cards give you a credit line equal to the amount you deposit and will report your monthly payments to the credit agencies. Use them every month, and pay off your balance in full and on time! Contrary to what is sometimes said, you don´t need to carry a monthly balance or pay interest to improve your credit score.
You should also make sure that the information on your credit report is accurate. Check that the debt dischared as part of your bankruptcy filling is not being reported as overdue. Sometimes this can happen.
Filed under Blog by 
