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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.
After you do file for bankruptcy, make sure to me with your creditors and advise them of the situation. Any non-exempt assets that you have such as cash and certificates of deposits will be required to be returned to the court-appointed trustee for your case. This is only the first of a long part of the process, however, the next part should remain on recovery and what you plan to do to maintain decent financial health in the future.
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.
Sometimes the biggest mistake those suffering from bankruptcy make comes from their negative attitude. A positive attitude can make all the difference in your credit and financial future even though you may not think so. There is truth to the "power of positive thinking" when it comes to bankruptcy, especially when so much about bankruptcy seems negative. Therefore, do your best to remain positive amidst the negative and you will find that you will have a renewed ability to meet the challenges that lie ahead.
For those that own cars, you will obviously still need them to get around, therefore talk with your car lender about signing a reaffirmation agreement. This agreement specifies your willingness to continue making payments and to act in good faith, thus allowing you to keep the vehicle. Remember, however, that if you do not act in good faith, your vehicle could be repossessed and sold and you will be liable for any deficiency.
An important part of recovery after bankruptcy is establishing new credit lines, which as mentioned above can be difficult because creditors are often hesitant to give you access to credit. While it is true that most traditional banks will not approve you, some banks will allow you to deposit money into an account and give you a credit card attached to that account, also known as a secured credit card. Although this may not seem like the greatest option, it will help you to eventually be eligible for a regular credit card.
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.
While you are seeking to re-establish your credit, it is important to resist co-signing for anyone. Although co-signing may seem harmless, if the loan goes bad, it will be on your record for awhile and their will be a judgment against you, especially because of the bankruptcy on your record. When it comes down to it, the risk is simply not worth it, even if you think it will help you build your credit.
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.
When you do file for bankruptcy, be aware that people will ask you about it, even though you might feel as if it is an invasion of privacy. Many crazy people file for bankruptcy, and chances are you are normal, just going through a difficult time; so, you should be willing to explain this to people, especially creditors so they do not wonder. Get your story straight so you know what to tell people regarding your situation.
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!
After you do file for bankruptcy, make sure to me with your creditors and advise them of the situation. Any non-exempt assets that you have such as cash and certificates of deposits will be required to be returned to the court-appointed trustee for your case. This is only the first of a long part of the process, however, the next part should remain on recovery and what you plan to do to maintain decent financial health in the future.
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.
Sometimes the biggest mistake those suffering from bankruptcy make comes from their negative attitude. A positive attitude can make all the difference in your credit and financial future even though you may not think so. There is truth to the "power of positive thinking" when it comes to bankruptcy, especially when so much about bankruptcy seems negative. Therefore, do your best to remain positive amidst the negative and you will find that you will have a renewed ability to meet the challenges that lie ahead.
For those that own cars, you will obviously still need them to get around, therefore talk with your car lender about signing a reaffirmation agreement. This agreement specifies your willingness to continue making payments and to act in good faith, thus allowing you to keep the vehicle. Remember, however, that if you do not act in good faith, your vehicle could be repossessed and sold and you will be liable for any deficiency.
An important part of recovery after bankruptcy is establishing new credit lines, which as mentioned above can be difficult because creditors are often hesitant to give you access to credit. While it is true that most traditional banks will not approve you, some banks will allow you to deposit money into an account and give you a credit card attached to that account, also known as a secured credit card. Although this may not seem like the greatest option, it will help you to eventually be eligible for a regular credit card.
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.
While you are seeking to re-establish your credit, it is important to resist co-signing for anyone. Although co-signing may seem harmless, if the loan goes bad, it will be on your record for awhile and their will be a judgment against you, especially because of the bankruptcy on your record. When it comes down to it, the risk is simply not worth it, even if you think it will help you build your credit.
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.
When you do file for bankruptcy, be aware that people will ask you about it, even though you might feel as if it is an invasion of privacy. Many crazy people file for bankruptcy, and chances are you are normal, just going through a difficult time; so, you should be willing to explain this to people, especially creditors so they do not wonder. Get your story straight so you know what to tell people regarding your situation.
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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