You must prepare for it, you’re the one filing, you’re the one brewing your own storm so do some planning. This will have a huge impact on your life afterward so you should prepare as soon as you begin thinking that bankruptcy is an option for you. If you do you can expect a smoother process during and after bankruptcy.
How To Prepare
One way to prepare for bankruptcy is to ask yourself if you’ll be secure in your present job if you file? People who work in government programs that require security clearances will need to consider this factor very carefully because this event must be reported to your employer’s security center as required by the government for individuals holding a security clearance.
Even if you work for a commercial employer, find out what their requirements are for reporting life-changing events. If you don’t have a job, you should do your best to get employed before you file, since more employers are now doing credit checks on their applicants before making offers.
File For Bankruptcy Alone
If you’re married, if at all possible, try to file alone, if both you and your spouse file together you will both suffer the same consequences after. If only one of your files then at least you got the other to be the face of good credit for both of you. This can more challenge especially if you have joint accounts, and if both your names are on the house and car titles, but if you prepare with plenty of time some of these could be arranged so that only one of you appears on these titles.
Stop Using Credit Cards
Stop using your credit cards at least 90 days before you file, this can make it difficult for the court to determine whether you’re eligible to file and your case could be thrown out. Or worse, the court may determine that your file is fraudulent, in which case expect to be liable.
Also do not make the mistake of making luxury type purchases with your cards, to include TVs, stereo systems or any type of expensive gadgets. Remember your transaction history will be reviewed by a trustee and these purchases will make it hard to pass that you’re truly in financial hardship. Necessities such as food, utilities, and medical expenses can be acceptable, but don’t overdo it.
If and when your bankruptcy case is filed, make sure you take advantage of the benefit of not having to pay your creditors and put this money away in a money market account. Your creditors will be expecting you to continue to make payments but legally they can not pursue this if you’re in the process of filing bankruptcy.
Saving this money will prepare you for what’s to come after bankruptcy and you’ll be glad you did. The process can last for up to 3 months, sometimes more, from the time you file, so save money, this is not the time to live it up!
The more you prepare for this event the better off you’ll be, bankruptcy is a life-changing event. One that involves a lot of headaches, heartaches and sleepless nights. It’s a very difficult moment in anyone’s life. It is very difficult to think clearly once you’re in this position, so if you feel that other options are possible, then exhaust every effort to go with other alternatives before you even talk to a lawyer.
What To Expect After Bankruptcy
So you prepared for it and now you get to start all over, nothing will come easy after bankruptcy. Continue to save money, keep track of what you spend, and to the few creditors you still pay to, make sure you pay them on time. The worse part is your credit report, you’ll need to keep up with this more often now.
Many online sources offer this service for around $12 to $20 a month, to send you alerts and let you view your report when you want to. If you can’t afford this service, then go to www.freecreditreport.com, where once a year you can get your credit report for free.
You may feel the relief after your case is discharged, but things will be hard after bankruptcy. As mentioned earlier it’s actually rather difficult to feel good about this fresh new start because of the difficulties you must now face for your lack of good credit.
Expect most creditors do not want to deal with you without extending special terms in which you must provide a money deposit or some kind of collateral. Normally you need to wait up to two years after being discharged to be able to apply for credit again, although that seems to be changing also.
Get A Loan and Credit
It is possible to get loans and credit after filing for bankruptcy. These are bankruptcy loans and their purpose is to help you get back on your feet and reestablish a positive financial record. For you to qualify for this benefit you must be discharged and/or debts must be either dismissed or satisfied.
Remember that if are successful at getting loans or credit after bankruptcy, you will not be able to get any more protection if you default again. You can only file bankruptcy once every ten years. So there will be nothing anyone will be able to do for you if you mess this up again.
You can also expect your bankruptcy record to remain in your credit for at least the next 10 years. So even when you begin to vigorously rebuild your credit, you will be fighting against that fact.
Once you have been discharged, it is also very important to focus on the decisions you make from now on. You will be contacted from time to time, by agencies that specialize in credit repair. This often sounds like a good idea after bankruptcy. You need to consider this very carefully, this credit repair service will not apply to everyone, but they will make it seem like it does. Learn more at http://markalexander.over-blog.com
If it sounds too good to be true, more than likely you’re better off shredding that letter. The same thing goes for lenders and car dealers who offer you discounts and tell you that your bad credit does not matter. You MUST read their rates and terms carefully if you so feel compelled to use their services. You’ve got a clean slate now and every decision you make now will make up the new foundation where you’ll build your next financial life, so be smart.