Many people are quite frightened when they think about bankruptcy. It is only natural that people are afraid of skyrocketing debt that causes hardship for themselves and their family members. The following advice will greatly help you if bankruptcy is a fear of yours.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. You can find services like counseling for credit that consumers can use. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. If you have to use a portion of your savings, make sure that you save some to ensure that you are financially secure in the future.
Check the accuracy of all information before it is filed. Inaccurate or incomplete information can lead to your petition being denied. Don’t fear speaking up since it affects your case and future.
You may still have trouble receiving any unsecured credit after a bankruptcy. A great way to rebuild your credit is to apply for a prepaid credit card. This will allow you to start building a good credit history while minimizing the bank’s risk. It will take time, but when creditors see a pattern that satisfies their need to see your good faith with payments, you will then be able to apply for unsecured cards.
Instead of relying on random selections from the phone book or Internet, ask around and get personal recommendations. To handle your bankruptcy, you need a trusted attorney, not a shady one that is out to take your money.
Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. The Bankruptcy Code lists assets considered exempt from being affected by bankruptcy. It is vital that you completely understand which assets are protected and which assets can be seized prior to filing bankruptcy. If you aren’t aware of this, you could lose some assets that you value.
Many people are frightened by bankruptcy, and for good reason. Filing for bankruptcy can be a very stressful and fearful experience, especially if you don’t know what you’re doing. You may have been scared before, but this article has probably allayed your fears. Apply this advice to improve your situation for yourself and any loves ones.