Bankruptcy and Tips On Repairing Your Credit After Getting Bankrupt

Bankruptcy &ndash means that you can’t pay off your debts at all. There are two possible ways that will provide you relief. Either the bankruptcy court will remove all your obligations to repay those debts that you are unable to pay (chapter 7) or chapter 13 which involves a 3-5 year plan during which you being the debtor must repay the debt.

 

 

Bankruptcy leaves long last effects on your credit reports. It also leaves a negative impression on your ability to receive credit cards and get loans in the future. Bankruptcy lasts for the next 7 years as a black dot on your credit report. You must not file for bankruptcy unless you encountered seriously bad credit conditions. You can go for other options instead of bankruptcy if you have current accounts.

Substitutes for Bankruptcy &ndash

You can ask your creditor to give you amnesties and leniency on certain terms to repay the debt. You can negotiate the repayment terms with your creditor and discuss your bad financial condition with him. After sharing your bad financial conditions with your creditor ask him to reduce the higher interest rates and payments. Contact all your creditors and try to convince them of your bad financial circumstances. Don’t be disappointed if they don’t agree on your terms and try to search for other creditors that are interested in working with you.

Bankruptcy

 

 

You can also negotiate with your lender and ask him to give some relief on payments for a certain time period. This step will shrink your monthly payments and you will be able to reach your financial obligations.

Search for consumer credit counseling if you fail to get relief on your payments from creditors. This counseling will help you to work with creditors. A credit counselor will guide you on how to get relief from bad financial conditions to meet financial obligations.

You can also sell out your valuable assets (if have any) to pay off the debts. Not only that but also you can sell certain valuable items to collect money for pay off. If you have saved some money in the past then you can also use it to pay off your debts.

Benefits of Bankruptcy &ndash

There are many benefits of bankruptcy. Bankruptcy will save your money from garnishment. Bankruptcy will also save you from questioning and judgment from the creditors. You can file bankruptcy to protect yourself from legal notice from creditors. You can also contact your attorney to take guidance about the benefits of bankruptcy.

Many people deliberately file bankruptcy to overcome their large medical bills. People who have medical insurance also prefer bankruptcy sometimes when insurance doesn’t work to reduce large medical bills.

Consult Legal counselor Before Filing Bankruptcy

You must consult legal counsel to get complete information about bankruptcy before filing for it. Consult with a lonely licensed bankruptcy attorney to get the reliable and right information. Consult with legal counsel to take guidance to deal with all debt-related issues before filing for bankruptcy.

 

Tips On Repairing Your Credit After Getting Bankrupt:

Your financial life is not in disaster if you’re going through bankruptcy. It’s only a minor setback if handled properly. By proving to the credit company that you are a responsible borrower, you can improve your credit score for a few years. Repairing your credit is possible, and you can come back to financial stability after filing for bankruptcy. Here are some easy tips on how to do it all.

Open a Savings Account for Repairing Your Credit

The primary step in rebuilding your credit is to open a savings account in the bank and deal with it responsibly. In this way, you will show credit companies that you are trustworthy.

Make On-Time Payments:

 

 

 

If you are late in the payment of your bills, and they are reported back to the credit companies, you will see an instant drop in your credit score. You may also risk having your accounts closed. So it’s important that you make your payments on time. It is preferable that you start automating your payments so that it’s less likely you’ll miss a payment. If you keep paying your credit card bills perfectly for over a period of 6-months, then you’ll start seeing an increase in your credit score.

Apply for Store and Gas Cards:

You can apply for store and gas cards, which is a simple way to show credit companies that you can responsibly manage money and make payments on time.

Close All Delinquent Accounts:

You have to make sure that all your delinquent accounts are closed. You have to track down your delinquent accounts by using your credit reports so that the owners of your debt can get your liquidation information and close up your account before your debt is sold to debt collection companies.

Buy a Used Car for Repairing Your Credit

You will need good credit lines to improve your credit score; therefore it is a good option to purchase a used car. Car loans are very easy to get as there are many dealerships that negotiate with people who are bankrupt.

Stop Going Over The Credit Limit:

You need to stop overspending on your credit. You will drop your score if you go over the credit limit. So to improve your credit you should purchase those items with your card about which you are absolutely sure you can pay off each month. You should keep a personal budget to help you pay easily in cash.

Avoid Payday Loans:

Payday loans can prove to be catastrophic to your credit score, particularly if you get caught in the process of extending the loan.

Review Your Credit Report:

You should order and review your credit report. Order all three copies of your credit histories from bureaus like Equifax, TransUnion, or Experian. They can contain a number of mistakes and discrepancies which can adversely affect your credit score. If you find any incorrect information in the report then you must report it to the credit bureau. Even a tiny mistake in the report can cost you big time.

Talk To The Creditors for Repairing Your Credit

If you want to settle outstanding debts then you can do it with the help of a credit repair agency. You should communicate with your creditors and start negotiating about the debt owed and how the outcome will be reported to the credit company. Don’t ignore your creditors, because if you don’t cooperate, they won’t cooperate. If you negotiate successfully then the creditors will hopefully report back to the credit company that the payment has been made in full and the account is in good hands. Not every creditor will help you but it never hurts to ask.

 

 

Don’t Repeat Your Mistakes:

Repairing your credit is an ongoing process, it isn’t fixed overnight; so therefore you should learn from your mistakes and never repeat them again. Always maintain your good credit score because it comes with a lot of short-term and long-term benefits, for example, you’ll get better deals, get awarded by the best interest rates, and gain financial stability.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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