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Before and After Bankruptcy Help Advice

Before Bankruptcy Help Advice

A bankruptcy help advice that you should follow before anything else is to consider bankruptcy only when you have no other choice in the matter. There may other ways to solve your credit problems that you have not tried. Speak with a credit counselor that can give you bankruptcy help advice, specifically to help you avoid filing.

If you are considering bankruptcy, then you should understand the two common types of bankruptcy.

* Chapter 7 Bankruptcy entails that certain assets of the debtor will be liquidated to pay the creditors. At the end of the process, most of the debtor’s debt is cancelled.

* Chapter 13 Bankruptcy is designed for individuals with regular income and involves a debt payment plan based on the debtor’s income with terms extended over three to five years, after which any unpaid debt is eliminated.

Find out the specific requirements of each option to determine under which you are eligible.

Before making a decision whether to file bankruptcy, you should realize that not all of your debts will be discharged by the court. Tax debts, college loans or child support are some of the non-dischargeable debts. Bankruptcy may be the solution you need if you are seeking relief from credit card debt and other unsecured types of credit.

Bankruptcy laws differ in every state, particularly when it comes to Chapter 7 bankruptcy. The rules on exemptions or what you may or may not keep in a Chapter 7 bankruptcy depends on the laws in your state. You may have to surrender your car or house if it has high equity and it is not protected by your state bankruptcy law. Other assets such as pension and life insurance may be at risk if your state classifies it as “non-exempt” assets. Although, most states protect these types of assets, do your research or ask a bankruptcy lawyer in your area to know what you might have to lose when you file  bankruptcy.

Bankruptcy is a highly stressful process and you have to be prepared emotionally and mentally to handle it. Again, before filing bankruptcy seek professional bankruptcy help advice from credit counseling agencies or consult with a reputable attorney who may help you negotiate with your creditors.

After Bankruptcy Help Advice

While bankruptcy leaves a bad mark on your credit report for several years, it should not discourage you from regaining your creditworthiness. Usually, you can obtain new credit if you show proof that your financial situation has improved. Creditors often consider those who have been consistently employed with the same company for at least two years.

A good bankruptcy help advice is to open a savings account to cover any emergency needs. To re-establish your credit, start with a secured credit card and make sure you meet monthly payments on time or pay the balance in full every month.

A common bankruptcy help advice when it comes to credit repair is to check your credit report for errors. You can get one free credit report per year from Equifax, Experian and Transunion. You can write, call toll-free or visit the websites of these companies to order your credit report.

Once you have your credit report, review the information it contains thoroughly. Check your personal information, account and credit payment information to make sure everything is accurate. Have all your timely payments since bankruptcy been reported? If there are any irregularities, inform the credit company in writing to have the information corrected. Prepare documents to back up your claims.