Filed For Bankruptcy? There Is Still Hope!

Because of the unfortunate economy, many people are finding themselves in financial difficulties that lead to bankruptcy. You could be one of these people, and the road ahead may seem dark and dreary with no end in site; yet, this does not have to be the case. The truth is recovery from bankruptcy is not simple and it is definitely not easy, however it is possible. Consider the following advice that may help you as you take the steps to set up a better financial future for yourself and recover from bankruptcy.

Once you file for bankruptcy, the first thing to do is contact your creditors because there are certain assets that are non-exempt from bankruptcy including cash and certificates of deposits. These non-exempt assets will be required to be returned to the court-appointed trustee during your case. However, this is just one part of the long bankruptcy process, and there is a long road to recovery in the future.

Do not be surprised if you find it tough to get a loan for the next few years, because most lenders out there are most likely skeptical about lending to someone who has recently filed for bankruptcy. Most people with a bankruptcy on their record will not be able to qualify for a home or car loan. However, if they do manage to qualify for a basic loan or a credit card, typically the interest rate will be extremely high.

Many people do feel hopeless because it is difficult to get credit and bankruptcy is hard on a person’s self-esteem, however, making wise decisions after bankruptcy will make all the difference in your situation. The most important thing you can do is to remain positive, especially with the negativity that surrounds bankruptcy. Focus on the future and be positive about it and you will find that your situation will be better than you anticipated.

For those that own cars, you will obviously still need them to get around, therefore talk with your car lender about signing a reaffirmation agreement. This agreement specifies your willingness to continue making payments and to act in good faith, thus allowing you to keep the vehicle. Remember, however, that if you do not act in good faith, your vehicle could be repossessed and sold and you will be liable for any deficiency.

One of the most important parts of recovery after bankruptcy will be establishing new lines of credit, which will be difficult given the bankruptcy on your record. Most likely traditional banks will not approve you, however there is a chance that they will allow you to deposit money into an account and give you a credit card attached to that card, also known as a secured credit card. This may not seem like the best option given that you recently filed for bankruptcy and money is tight, however, it is necessary to establish some sort of credit.

Besides working to build better credit for the future, you will also want to access your credit report and make sure that it is clean. There are credit bureaus – Equifax, Experian, and Trans Union – that you can check with to make sure that your debts have been eliminated due to bankruptcy. If the reports do not show this, talk to the bureaus and get them updated.

Many people want to build their credit during this rough time and so they consider co-signing with someone. However, experts warn that this is not the smartest idea and that the risk is ultimately not worth the reward. It may seem harmless, however, you never know when the co-signer could default on the loan causing another issue to your credit that you do not want or need.

Also, when it comes to credit cards, do not carry a balance if you do not have to. Many people assume that a credit card balance is good for your credit, however it is not smart for your financial future because you never know what financial emergencies could come up and get in the way of your ability to make payments. Therefore, if you can, pay the balance in full.

Although bankruptcy may seem embarrassing, many people have to file for bankruptcy, and creditors will want to know why you had to file. Do not be surprised when they ask, and be prepared with a story to tell them. This is not a fake story, merely a realistic explanation of what happened.

Remember – stay positive. Time goes quickly and if you can follow the advice above the recovery process will go a lot smoother than you anticipated!