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Bankruptcy Is a New Beginning: 5 Things You Can Do After Filing for Bankruptcy

 

Bankruptcy should be the last resort for any individual or company. There are companies like General Motors who file for bankruptcy, yet emerge unscathed. There are “lucky” people who go through the entire bankruptcy ordeal and reemerge to be successful later on. Bankruptcy can be terrible, but it is not the end of the world. The fear of bankruptcy stems from popular misconceptions and misunderstandings.

Firstly, we would like to draw your attention to the fact that there are three types of bankruptcies. In general, individuals file for Chapter 7 or Chapter 13. Companies usually file for Chapter 11. Chapter 7 or 13 usually come after unexpected financial stress that includes medical emergencies and lawsuits. Since you are already here, we can assume that you already know the major causes of such financial stress and you have chosen the option best suited for your situation.

Since you have already filed for bankruptcy, here are the five things you can do to make sure your stay afloat.

  1. Get all the paperwork in one place –

We hope you have used a lawyer for filing the bankruptcy. It is a treacherous path that requires expert guidance. You should already have a complete copy of your petition from your attorney. It should be a detailed (40-50 pages) information on your financial situation. The petition should include all the updated facts about debts and assets. You should also have in possession, a copy of the notice of bankruptcy filing from the court. This document will contain all the deadlines for your court case. Next, you should have a copy of your discharge order from the judge.

Other documents may include you credit counseling records, education certificates, and other property certifications. Always keep at least one copy of the first three documents in person. If you have misplaced them, you can file for fresh copies online for a nominal fee.

In case you need to apply for new loans, your lenders will like to see a copy of these documents. For example – if you want a mortgage loan, you will have to show these bankruptcy papers at any cost. It is important for companies and lenders to see if bankruptcy has waived your old debts before they assign new credit.

  1. Checking credit reports –

Since you have filed for bankruptcy recently, you obviously don’t expect your credit score to soar. However, it is smart to keep an eye on your credit record. It is important to see what creditors are thinking about you. You can obtain one credit report from each of the three leading credit report agencies of the U.S. at least once every year.

Make sure you have waited at least six months before you start reviewing your credit reports. Sometimes, it takes multiple billing periods for creditors to get their records up to date.

You must do this to make sure that all of your discharged debts reports from the bankruptcy reach the credit bureaus with a zero balance. It should not stand as an outstanding debt in the near future when you apply for new credit. Bankruptcy can stay on your account for 7 to 10 years. It is crucial that you get a detailed view of how it is currently affecting your credit score.

  1. Make a plan –

You cannot escape bankruptcy without a plan. This plan includes listing all liabilities and assets. You need to make a necessary expense sheet to cover all utility bills and family responsibilities. We understand that most bankruptcies are a result of sudden unemployment, unexpected medical expenses and/or family emergencies.

Therefore, we are here to help you out. We have an excellent debt counseling team who can help you understand your immediate responsibilities and prioritize your expenses. You still need to pay your tax debts, child support, alimony, debts for fines or penalties and debts for DUI. These are non-dischargeable payments that all debtors need to pay.

That is why you need debt counseling even after you have already filed for bankruptcy. If you have filed bankruptcy with the hope of discharging all debts, then you will be disappointed. Post-bankruptcy filing, you will have to deal with these payments as well as attorney fees (this can be 4% of annual income).

  1. Emergency money –

Although you are already in an emergency, the bankruptcy will give you a moment’s respite. That is exactly the right time to start an emergency fund. Before you face another financial challenge, you need to prepare yourself and your family.

It is all a part of sound financial planning. With the help of expert debt counselors, you should be able to pay off your debts and save a little. You can start saving in less than a month after bankruptcy. After all, bankruptcy does not mean, not having any money at all. It basically means your creditors cannot extract money from your account for repayment of loans. It puts an “automatic stay” on all your assets and accounts.

  1. Consider new credit –

Moving on is the best thing you can do after an episode of bankruptcy. Credit is an integral part of modern life. We are not urging you to be daring right now; we are merely asking you to think about it!

Getting new credit will be challenging, and it won’t come immediately. It will eventually come with time and effort. If you want to rebuild your credit from this position, you will need expert advice. You can surely consult a debt counselor. We have a dedicated counseling team, who specializes in clients who are recovering from bankruptcies. They have all the real-life experiences possible, honed for your every need. They will teach you how to start with a small credit and slowly build on top of it.

Bankruptcy is not the end. It is merely a pause during a tedious journey of credits and debts. It is, in fact, a rare opportunity to start over. If you have just filed for bankruptcy, check out https://bayareatitleloans.com/ for unique ways in which you can restart your life and guide it towards prosperity.

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