If overdue bills are piling up and the phone won’t stop ringing from bill collectors,
you are probably understandably stressed out and scared – no one likes the feeling of not being able to manage their finances.
However, there is a light at the end of the tunnel.
Sometimes filing for bankruptcy (especially Chapter 13) can really be the beginning of a new era in terms of fiscal responsibility,
not to mention stress relief!
Here are the top three tips for dealing with bankruptcy – both during and after the fact.
1) Be Selective About the Attorney Selection Process.
One of the most important decisions you can make (after deciding to file) is to pick the right lawyer or firm.
As money is tight, you want to choose someone who knows financial law inside and out,
who has lots of experience and credentials that signify past success in this field.
You want an attorney who will get you out of this mess and actually end up saving you money in the end, if anything.
Rather than just looking in the phonebook or searching online, it can be smart to ask around to people whom you trust for debt attorneys.
Although you may not want to bring this topic up because it can be seen as embarrassing, you never know who else has dealt with similar issues.
It is better to talk to someone you really trust and get a good lawyer than to pick someone without a recommendation.
2) Go for Chapter 13 Rather Than Chapter 7 if You Possibly Can.
Once you are working with an attorney, see if you can possibly get a Chapter 13 rather than a Chapter 7 filing.
While Chapter 7 discharges all of your unsecured debts,
it can have seriously unwanted consequences, such as destroying credit completely or worse – having your wages garnished, vehicle or home taken away.
Chapter 13 is a better way to go, because it is really debt reorganization.
Typically, you agree to pay a portion of the amount you owe back with installments, and you can usually keep your home, car and work income (minus whatever you agree to pay with each installment, of course).
Credit after Chapter 13 has a much better chance of being decent than with other bankruptcy choices, which means that it’s easier to buy new cars, homes, etc. in the future.
3) Be Patient & Cooperative During the Process.
While you do have the benefit of peace from creditors once your lawyer is involved (he or she will notify them that you are taking care of the issue and to “cease and desist” with contacting you directly), it does take time.
Typically, it takes 90 days for bankruptcy to be filed, and you may be required to take a class on debt management or financial responsibility.
Bear with all of this and try to be as cooperative as possible. By honoring your agreement and paying subsequent bills on time, you’ll successfully learn how to improve credit score after bankruptcy.
Bryan filed for Chapter 13 bankruptcy seven years ago, and has been trying to rebuild his credit ever since.
He found resources like acclaimlegalservices.com to be helpful throughout the filing process.
With his hard-earned knowledge, he hopes to help others start on a more financially solvent path.