Due to the current state of economy, bankruptcy has become quite common. If you find yourself in the position to have to file for bankruptcy, do not feel that you are alone. The best thing you can do at this point is learn more about what you need to keep in mind during the process. Continue reading this article to find out more.
Should You File For Bankruptcy?
Before you make the huge decision to file for bankruptcy, you should verify that it is necessary. To figure this out you simply need to compare your income to your bills. From there determine what, if any money, you have to put towards your debt. Then add up the monthly expenses of paying your debt. If your debt payments are more than twice what you have in excess earnings, then it is likely that bankruptcy is the right choice for you.
If you are planning to file for bankruptcy you should request your credit report from all three of the major credit bureaus. Once you receive all three credit reports, you need to go through them and determine which debts you would like to include in your bankruptcy. Depending on the type of bankruptcy you choose, you might want to include almost all of your debts. Whichever you choose, you should then make a formal list of all creditors, their contact information and the amount that you owe them. This information is important for the next steps in the bankruptcy proceeding. Without it you will be leaving yourself with any debt that you do not record with the court.
After you have compiled a complete list of all of your debts, it is your responsibility to inform your creditors in writing that you are in the process of filing for bankruptcy. This will let them know to not call and harass you, and it will also inform them that they need to take action in the court proceedings as well. If you do not inform them in a timely manner, they will not be required by law to acknowledge your bankruptcy.
After you have begun the bankruptcy process, it will be very difficult to obtain lines of credit. Of course you probably already knew that. To counter the effects that the bankruptcy will have on your credit rating, you should get at least one secured credit card. This will incur fees that are higher than with a standard credit card, but the benefit is that it will show the credit bureaus that you are paying your bills on time. If this occurs for a year straight, your credit score will be greatly improved. Having good credit again will save you a lot of money when you start to take out loans again.
Now that you know what is important when it comes to filing for bankruptcy, you should feel better about going on with the process. Be sure than you use the information in this article, and any other articles that you read, to make the best of your upcoming bankruptcy.
