What To Know Concerning Declaring Bankruptcy

Declaring bankruptcy is a legal way to protect certain assets from your creditors. In bankruptcy, you may be able to protect your home and certain personal items from being taken to pay for debts. If you have assets in excess of the limits stated by the law, they may be sold at auction and the proceeds distributed to debtors in proportion to your total debt in order to meet your obligations.

Bankruptcy should not be thought of as a first resort. Filling is a very serious matter and may prevent you from getting credit for ten years in the future. Even after it leaves your credit report, it can still be found in the court records.

The ten year limit of reporting applies to the credit reporting agencies. These agencies are responsible for making a report to potential creditors that inquire about your past payment history. After the time is up, the bankruptcy will drop from your report and no longer affect your score.

Once you bankruptcy is closed, you will want to start the rebuilding of your credit quickly. One of the easiest ways is through the purchase of a vehicle. Vehicle loans are easier than home mortgages and if you show that you are able to make a regularly scheduled payment on time, you can rebuild your credit effectively.

It is also vitally important to make payments for reaffirmed debts in a timely manner. This can show future creditors that you take the obligation to pay your bills seriously. They may even be willing to overlook the bankruptcy mark if you are currently meeting obligations.

You need to know that bankruptcy is not the worst thing that could happen to you. While filing bankruptcy can be very depressing, it is not the end of the world. In the midst of your financial crisis, self care is very important.

By filing for bankruptcy, you protect your paycheck. Creditors will not be able to garnish a paycheck. That monthly income needs to be used to meet needs of the family. Make sure that basic needs are being met. Food and utilities are important bills that must be paid. While in protection, you should learn to live with less. You may have less than before, but you can still learn to be happy with what you have.

Declaring bankruptcy can be emotionally draining for both individuals and for families. It can stop the collectors phone calls and protect certain assets from collection activity.

Enrique Castillano also writes about Bankruptcy and Credit issues including Declaring Personal Bankruptcy and Cost of Declaring Bankruptcy

Published by: Enrique Castillano on March 27th, 2010 | Filed under Legal



Leave a Comment

rss feed