Filed For Bankruptcy? There Is Still Hope!
Because of the unfortunate economy, many people are finding themselves in financial difficulties that lead to bankruptcy. You could be one of these people, and the road ahead may seem dark and dreary with no end in site; yet, this does not have to be the case. The truth is recovery from bankruptcy is not simple and it is definitely not easy, however it is possible. Consider the following advice that may help you as you take the steps to set up a better financial future for yourself and recover from bankruptcy.
When you do file for bankruptcy, it is extremely important to speak with your creditors about you situation so they know what is happening. There are certain assets that are non-exempt from the bankruptcy process, including cash and certificates of deposit, and you will be required to return these assets to your court-appointed trustee. This is typically the first part of the many steps required for bankruptcy, though, the next steps should focus on recovery so that you can create the best financial future possible for yourself, despite the circumstances.
During the next few years, it will probably be difficult for you to get credit from lenders because they are usually hesitant to work with people who have filed for bankruptcy. Typically, when you file for bankruptcy, you will not be able to qualify for a home or car loan right away either. However, there are some creditors out there who might be willing to offer you credit at a high interest rate.
Although, it may seem hopeless, what you do after bankruptcy can make the difference in your credit and your financial future; so, try your best to remain positive. A positive attitude will go a long way in a bankruptcy situation, even though you may not think so. There is so much truth to the theory, "the power of positive thinking," so apply the theory to your situation and use it to your advantage.
If you own a car and are still making payments, consult with your lending about signing a reaffirmation agreement. This agreement states that you want to continue making your continue making car payments and, therefore, keep the vehicle. Keep in mind, however, if you do not make your payments, your car will be repossessed and sold - you will be liable for any deficiency. Yet, with you sign the agreement, it acts as good faith and gives you more flexibility when working with your lender.
Obviously, even though it will be difficult, you will want to establish new credit accounts to create positive credit for the future. It will be difficult to get traditional banks to offer you credit, however, there is always the option of depositing money into an account and having a credit card attached to that account - also known as a secured credit card. For many this does not seem like the best option, however it does help build credit and therefore is a wise choice when it comes to establishing credit for the future.
Besides working to build better credit for the future, you will also want to access your credit report and make sure that it is clean. There are credit bureaus - Equifax, Experian, and Trans Union - that you can check with to make sure that your debts have been eliminated due to bankruptcy. If the reports do not show this, talk to the bureaus and get them updated.
Many people want to build their credit during this rough time and so they consider co-signing with someone. However, experts warn that this is not the smartest idea and that the risk is ultimately not worth the reward. It may seem harmless, however, you never know when the co-signer could default on the loan causing another issue to your credit that you do not want or need.
If you are able to get new credit cards, pay them off in full if possible. Some people assume that they should keep a balance because it is better for their credit; however, it is not always financial smart. You never know what financial emergencies you could have in the future, and therefore, it is a great idea to pay in full so you do not have credit card bills to deal with at the same time as another crisis.
Although bankruptcy may seem embarrassing, many people have to file for bankruptcy, and creditors will want to know why you had to file. Do not be surprised when they ask, and be prepared with a story to tell them. This is not a fake story, merely a realistic explanation of what happened.
Remember - stay positive. Time goes quickly and if you can follow the advice above the recovery process will go a lot smoother than you anticipated!
When you do file for bankruptcy, it is extremely important to speak with your creditors about you situation so they know what is happening. There are certain assets that are non-exempt from the bankruptcy process, including cash and certificates of deposit, and you will be required to return these assets to your court-appointed trustee. This is typically the first part of the many steps required for bankruptcy, though, the next steps should focus on recovery so that you can create the best financial future possible for yourself, despite the circumstances.
During the next few years, it will probably be difficult for you to get credit from lenders because they are usually hesitant to work with people who have filed for bankruptcy. Typically, when you file for bankruptcy, you will not be able to qualify for a home or car loan right away either. However, there are some creditors out there who might be willing to offer you credit at a high interest rate.
Although, it may seem hopeless, what you do after bankruptcy can make the difference in your credit and your financial future; so, try your best to remain positive. A positive attitude will go a long way in a bankruptcy situation, even though you may not think so. There is so much truth to the theory, "the power of positive thinking," so apply the theory to your situation and use it to your advantage.
If you own a car and are still making payments, consult with your lending about signing a reaffirmation agreement. This agreement states that you want to continue making your continue making car payments and, therefore, keep the vehicle. Keep in mind, however, if you do not make your payments, your car will be repossessed and sold - you will be liable for any deficiency. Yet, with you sign the agreement, it acts as good faith and gives you more flexibility when working with your lender.
Obviously, even though it will be difficult, you will want to establish new credit accounts to create positive credit for the future. It will be difficult to get traditional banks to offer you credit, however, there is always the option of depositing money into an account and having a credit card attached to that account - also known as a secured credit card. For many this does not seem like the best option, however it does help build credit and therefore is a wise choice when it comes to establishing credit for the future.
Besides working to build better credit for the future, you will also want to access your credit report and make sure that it is clean. There are credit bureaus - Equifax, Experian, and Trans Union - that you can check with to make sure that your debts have been eliminated due to bankruptcy. If the reports do not show this, talk to the bureaus and get them updated.
Many people want to build their credit during this rough time and so they consider co-signing with someone. However, experts warn that this is not the smartest idea and that the risk is ultimately not worth the reward. It may seem harmless, however, you never know when the co-signer could default on the loan causing another issue to your credit that you do not want or need.
If you are able to get new credit cards, pay them off in full if possible. Some people assume that they should keep a balance because it is better for their credit; however, it is not always financial smart. You never know what financial emergencies you could have in the future, and therefore, it is a great idea to pay in full so you do not have credit card bills to deal with at the same time as another crisis.
Although bankruptcy may seem embarrassing, many people have to file for bankruptcy, and creditors will want to know why you had to file. Do not be surprised when they ask, and be prepared with a story to tell them. This is not a fake story, merely a realistic explanation of what happened.
Remember - stay positive. Time goes quickly and if you can follow the advice above the recovery process will go a lot smoother than you anticipated!
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posted by SolveItQuick at
11:04 AM
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