Declaring for bankruptcy is a hard decision that carries with it a lot of weight you must account for; there are lots of processes and duties that one must carry out when declaring bankruptcy. There are also the different types of bankruptcy that you can declare, a Chapter 7 declaration will stay on your Credit Report for up to 10 years, while Chapter 13 disappears after 7. Always research what process is the right path for you to take next. Most importantly, you must ensure you are stable and secure in whatever situation you have found yourself in.
Informing Creditors and Liquidating Assets
Perhaps the most important step to take after you have declared bankruptcy is letting the appropriate persons know of your decision. This will give you more time to get pieces in order and will change the processes in which your creditors will come looking for any debts or payments. The court will also begin procedures to liquidate any nonexempt assets you may have, this can be cash or any deposits of assets you have made throughout your life. You will be allowed to keep possessions such as furniture or your car, as long as the assets do not go over a certain value. Consider appointing a chosen attorney during this process in order to see that your best interests are kept in mind, although, all decisions must benefit the creditors primarily as they try to get back their funds. For those in California, attorney Ahren A. Tiller has been the attorney on record for over 8,000 bankruptcy cases and is guaranteed to get you the best possible deal you can afford.
Paying Your Bills
It is very important post-bankruptcy to keep your record as clean as possible, any missed payments will severely impact your already damaged credit score. Getting yourself stable with a well-paying job is an important step you should take to ensure your record is kept clean. Always keep a watch over your expenditure and make sure you are not living outside your means during the duration of your bankruptcy. Any further damage to your record might ensure you are never able to recover with further loans or assistance. It will be extremely beneficial to open up a savings account to deposit money in as security. Maintaining both a checking and savings account in a positive number will show other creditors that you now have a reliable cash-flow. Luckily, many banks offer a second-chance program for those who have declared bankruptcy, allowing you to maintain a savings account with them under guidelines.
Rebuilding Your Credit
Along with maintaining your savings account, it would be wise once you are financially stable again to regain a credit card in order to build up more positive credit. Using the card wisely and ensuring that all spendings are accounted for and within reason will go a long way in showing creditors once again that you are to be trusted. However, even after years of successful credit building you will still have trouble applying for large loans on expenditures such as a car or house. This is where co-signs and guarantors come in, by finding reliable trustees who believe in you, you have a stronger case for applying for loans.
Conclusion
Declaring bankruptcy can be an extremely hard process and can also mentally damage you as well as credit wise, however, never consider it a failure. Bankruptcy is just a setback and one that everyone has the potential to come back from. Surround yourself with people who are eager to see you succeed once again and always look at the future with bright and hopeful eyes.
