If you're deep in debt, and you don't see any viable way out, you may consider bankruptcy. Bankruptcy can give you the foundation you need to rebuild after financial ruin.
Many people avoid bankruptcy because they think that their credit will suffer permanent damage. However, that's not the case. In fact, you can begin to rebuild your credit as soon as your bankruptcy is discharged.
When you file for bankruptcy, you need to take precautions to avoid problems with the process. Here are five steps that will help you avoid problems and find life after bankruptcy.
1. Consider Your Options
If you've decided to file for bankruptcy, be sure to consider all your options. There may be steps you haven't tried that will help you avoid bankruptcy altogether.
Some of those options involve payment modification, borrowing money from friends and family, or selling your assets to settle your debts. You also may want to sign up for credit counseling, which will help you avoid financial problems in the future.
2. Work With a Bankruptcy Attorney
If you plan to file for bankruptcy, work with an attorney. Bankruptcy laws have changed over the years and you need to make sure that you're not missing any steps along the way.
Your bankruptcy attorney will ensure that all filing deadlines are met, which is crucial. In fact, if any of your paperwork is filed late, your bankruptcy petition may be dismissed.
3. Provide Accurate Debt Information
If you've been harassed by creditors in an attempt to collect on debts, you're probably in a hurry to file for bankruptcy protection. When you rush through the paperwork, you run the risk that some of the vital information will be omitted. For instance, you may accidentally omit some of your creditors or list incorrect account information.
Unfortunately, those mistakes could lead to problems with your bankruptcy petition. They could also prevent some of your debt from being included on your bankruptcy, which means they won't be discharged.
To make sure you aren't left with debt once your bankruptcy is discharged, double or even triple check you provided accurate debt information on your petition.
4. Notify Your Creditors Right Away
Once you file for bankruptcy, notify your creditors right away. As soon as your creditors have received notification of your bankruptcy petition, they will be prohibited from any attempts at debt collection.
However, if you don't alert your creditors to your bankruptcy petition, they'll be free to continue all collection attempts. If creditors continue to harass you in an attempt to collect on the debt, contact your attorney as soon as possible. You may have legal remedies to stop the contact permanently.
5. Avoid Post-Bankruptcy Credit Card Problems
When you and your attorney go to court for your bankruptcy petition, you will have the opportunity to reaffirm some of your debt.
If you have credit cards, try to avoid the reaffirmation of that debt. You may think that reaffirming your credit card debt will help your credit, but that is not necessarily the case.
If you find yourself deeper in credit card debt following the discharge of your bankruptcy, you could end up in financial problems all over again. Instead, let your credit card debt get discharged with the rest of your bankruptcy, and then apply for a secured credit card once you're back on your feet. A secured credit card will help you rebuild your credit after bankruptcy.
If you're in debt, and there's no way out from under the mountain of bills that continue to stack up each month, contact the professionals at Terry E. Hurst, Attorney at Law. We can help you through the bankruptcy process.