Bankruptcy is a sensitive topic for a variety of reasons. The most apparent is the potential financial havoc it can wreak. A close second is the negative stigma that is frequently associated with the process. This negativity must be mentioned because strong emotions can sometimes result in financially irresponsible decisions with detrimental outcomes.
When a person's cash flow is negative, filing for bankruptcy becomes a viable option. In other words, when a person has more monthly expenses than income, insolvency should be considered if there is no prospect of reversing this negative cash flow. The longer a person waits to investigate the available options, the more dire his or her situation may become.
One of the worst things individuals can do in this circumstance is to borrow more money in an attempt to pay off their obligations. On paper, this is an obviously imprudent financial choice. In the actual world, however, it is extremely common for individuals to employ this tactic in an effort to buy time and delay filing for bankruptcy. On the surface, this is a noble idea; however, it often exacerbates the problem and merely delays the inevitable.
For many homeowners experiencing negative cash flow, it is preferable to communicate with a qualified mortgage professional. An experienced loan officer can examine your finances objectively and help you determine if refinancing your mortgage would not only be beneficial, but could also eliminate the need for bankruptcy.
Consult a reputable bankruptcy attorney and credit counselor if you are forced to file for bankruptcy. A qualified mortgage specialist can also provide you with references, as he or she works with these professionals frequently. Referrals from reputable sources are essential in this instance because experienced professionals significantly increase the likelihood of a successful bankruptcy filing. It's that easy.
When declaring bankruptcy, you must be entirely truthful and accurate about all aspects of your financial situation. This includes any income changes that may occur throughout the procedure. Bankruptcy is a federal procedure that is administered by actual judges and reviewed by agents who coordinate with the Department of Justice, the FBI, and the Internal Revenue Service.
Here are some additional measures you can take to make the process of filing for bankruptcy as painless as possible:
- Save and organize all documentation related to your bankruptcy. After filing for bankruptcy, you will benefit from having all relevant information in one location. Additionally, be careful to record your discharge date. It's remarkable how often this is forgotten.
Establish a budget for the household. This can be accomplished in a variety of methods, but there are several inexpensive computer programs that perform the task admirably.
- During the bankruptcy, you should not only try to live below your means, but also to save as much money as feasible. You never know what you might require it for once the process has been completed.
- Anticipate a deluge of spam mail. There will be unscrupulous individuals looking to capitalize on your need for credit.
Credit Rebuilding Tips:
If you must purchase a vehicle, prioritize transportation over appearance. Attempt to obtain a loan to purchase a low-cost, used vehicle. It is prudent to first determine what your budget allows in terms of a dollar quantity. This means obtaining financing before automotive shopping.
- Apply for a secured credit card. Secured credit cards permit the cardholder to deposit a specified sum of money into an account, thereby establishing the card's spending limit. Instances of missed payments result in account deductions. Some of these cards reward responsible debtors by increasing their credit limit without requiring an additional deposit. Some convert the account into a conventional credit card. (Be wary of ""easy credit"" offers or any card that requires you to contact a 900 number. The call will be invoiced to your account.)
- Consult with a credit repair expert. Not only can they help you repair your credit report, but they can also give you advice on how to rebuild the credit you lost. One of their initial stages is to have you send credit reporting agencies copies of the discharge document outlining which debts are no longer your responsibility.
Therefore, the answer is YES, there is life after bankruptcy. Use these strategies to slowly and carefully rebuild your credit. Ensure that you pay ALL your bills ON TIME going forward, as late payments and other negative marks can be catastrophic at this juncture. With a little time and a pristine credit history, you can be back on your feet and better than ever after discharge.""
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