How Filing Bankruptcy Will Effect Your Credit
While bankruptcy is often a last-resort measure, sometimes it’s simply unavoidable. Filing for personal bankruptcy may be the only option available to you; even though, it can be very hard on your credit rating.
Filing for bankruptcy and its effect on your credit
Filing for bankruptcy may damage your credit less than missing payments. Bankruptcies can remain on your credit reports for 10 years, but you can jump right into repairing your credit. One of the nicest things about bankruptcy is that it gives you a fairly fresh start.
Tip: right after having your bankruptcy discharged. Start building credit. Get a secured credit card and work hard at building new lines of credit.
What You Need To Do Before Contacting A Bankruptcy Lawyer
Researching your personal bankruptcy options is the difference between a successful and an unsuccessful claim. There are 4 types of bankruptcy.
- Chapter 7: Chapter 7 bankruptcy will discharge most types of unsecured debt. The trustee will sell any significant nonexempt property in order to repay your creditors.
- Chapter 13: Chapter 13 bankruptcy, you repay your creditors (some in full, some in part) through a Chapter 13 repayment plan.
- Chapter 11: another form of reorganization bankruptcy that is most often used by large businesses and corporations.
- Chapter 12: 12 bankruptcy is designed for farmers and fisherman.
Familiarize yourself with the bankruptcy code before you file. It can be tough to keep up with them on your own, and because they change often, a bankruptcy attorney can help you keep track for the sake of your filing process. To stay up-to-date on these laws, check out your state’s government website.
Know which assets can and can not be seized.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. The Bankruptcy Code provides a listing of the various asset types that are not included in the bankruptcy process. It is important that you read this list before filing for bankruptcy, so that can find out whether or not your most prized possessions will be seized. If you neglect this important step, you might be blindsided when a possession that is important to you is taken to repay creditors.
What to do when you meet with a lawyer
When you do meet with a lawyer make sure that they answer all of your questions and that they do not charge you for consultation alone. Seek free consultations from a handful of lawyers, before deciding which one to hire. Decide which lawyer you like best buy reviewing all of the lawyers’ answers to your questions. Choose the lawyer who addressed your issues the best. Take your time before you decide to file after you meet with your lawyer. You can take as much time as you need to meet with different lawyers.
How Filing Bankruptcy Effects You Personally
It does not take much experience with bankruptcy to understand that the entire process can be extremely stressful.
Don’t overly concern yourself with any negative feelings you are having. Many people get feelings of guilt and shame over not being able to handle their debt problem on their own.
Yes, it may be hard to admit the need for help, however, if you try to stall and wait to get help you are just making your situation worse.
The best way to lessen this stress is to employ a lawyer, who can handle most of it for you. Get recommendations and look into other qualifications rather just choosing based on cost alone. Make sure that you verify their reputation through various sources including people in your circle of friends and the BBB. If you wish, you can attend a bankruptcy hearing and witness your attorney in action.