Tuesday, November 1, 2011, AM | 5 Comments
Bankruptcy can be ugly, but if you find yourself in the dungeons of human behavior, hold your head up and confront the issues head on.
Analyze what you have been through in your financial life or better yet think and think hard about why you got into this mess.
Fortunately, there are logical steps and resources to help you survive and rebuild during these, needless to say, trying times.
For individuals, Chapter 7 is the most common form of filing, where there is a complete liquidation of most assets and most past debts are discharged, with the exception of things like child support and income tax.
However, you do not have to go down this path alone – many have gone through it and it would be sensible, on our part, to leverage the knowledge of these experts that comes with experience.
First thing first. Talk to an expert
When you file for bankruptcy, you may feel that you are all alone in facing the financial and emotional turmoil associated with this event.
However, if you keep your head up and open your eyes, you will find that a network of experts and support groups exist to help you through these trying times.
Using your favorite search engine, do some research and find a reputable and “honest” financial expert and a lawyer to help you go through this difficult time.
Opportunity to start evaluating your financial habits
Think of it as an opportunity and start evaluating your financial habits that got you into this mess in the first place.
Your assets, if any, will likely be gone and it will be nearly impossible to have access to credit cards or other forms of credit for quite some time.
You may be forced to rely solely on the cash in your bank account to pay your bills and fund your lifestyle with little or no room to over-extend yourself.
Establish greater financial discipline and better track your spending patterns. Your expenses, for some time, will include just utility bills and nothing else.
Apply for credit cards right away
There is nothing wrong with starting to apply for credit cards right away, although you will find little or no success in getting approved.
You may want to consider a secured credit card where you actually put cash up as collateral.
It may be money out of your pocket, but you will have limited access to a credit card that you can use to start building a payment history. Once you get it, pay a lot more than the minimum every month. Do so to rebuild your credit history.
Change your mindset 180 degrees
Be careful next time. Once you have filed bankruptcy, make a commitment to yourself and don’t do it again. This time have a budget and follow it strictly if you want to get out of the deep shit you got into, whether because of your own making or circumstances you could not avoid.
Rebuild your credit
There are methods to rebuild your credit and get back on your feet. Make good financial decisions, and do not feel you are all alone. Needless to say, millions have gone through this process and you will find that support and resources to help you recover from bankruptcy are widely available.
Credit reports after bankruptcy
Your bankruptcy can be reported on your credit report for 10 years from the filing of the case. If you file a bankruptcy and voluntarily dismiss it before the discharge, the credit reporting agency must report the dismissal as well as the bankruptcy filing.
In a Nutshell
Negative history on your credit report is just that: history. It does not doom you to perpetual credit rejection. It does challenge you to strengthen your financial present by saving and using credit carefully.