The Hard Truths About Bankruptcy
Filing for bankruptcy is not a simple solution. We should get that out of the way right up front. It is important to know right from the beginning that bankruptcy isn’t a “get out of jail free” card from the government. Bankruptcy can take away most debts, but it is going to cost you something in return.
Important Bankruptcy Information You Need to Know
The first step should be to gather all of the information you can on bankruptcy. I recommend free organizations like the Bankruptcy Help Desk. If you’ve exhausted all your other options and must file bankruptcy, filing is only the second step. First you need to get credit counseling. Bankruptcy comes only after you’ve gone through all of the plan you received from credit counseling. This is because you need to be viewed as unable to pay your bills. A credit advocate has to say that there is no hope of you paying off your debt, so bankruptcy is the only option.
If you file for bankruptcy, it will stay on your credit report for 10 years. After you’ve filed for bankruptcy, it’s going to be hard to get new credit for quite awhile. Two years is the minimum it takes for most people to get credit. Unfortunately, some people can’t even get that. A bankruptcy on your credit report can actually determine whether or not you get a job. Many employers will request credit reports to see how potential hires handle their money. That will be really important if you want a job in any financial capacity.
Your Credit Life After Bankruptcy
When you do get credit after your bankruptcy, you’re going to get hit with high fees and interest rates. That will mean tacking on thousands of dollars in interest onto any price tag. A lot people try to wait out that 10 year period until the bankruptcy is removed from their credit report. If you choose to wait out the 10 years, you are unfortunately going to be starting all over again with no credit history.
Your first step should always be to find and talk to a credit counseling service to see what help they can give you. These services can generally help reduce debit and required payments and also blocking interest accrual. That will help you pay off the debt faster without adding more to it. Liability consolidation may be a good option if your credit hasn’t sunk too low. That allows you to lump together all of your unguaranteed debts. Those kinds of debts haven’t been assured by confirmative companies. This lets you consolidate all your debts into one simple payment.
Bankruptcy isn’t easy by any means, but there is a secret: credit companies are willing to work with you. They know that if they work with you, they may get some or most of that debt back. If they turn you away, they get nothing. It’s always in their best interests to keep you out of bankruptcy. To find out more about tricks like this click here for free bankruptcy resources.
Tags: bankruptcy, credit, Credit Report, filing for bankruptcy