Before Filing
Preparation is one of the most vital aspects of the bankruptcy procedure. When you are ready to file for bankruptcy, you will need several documents, the most essential of which is the bankruptcy petition. This document describes your financial history in terms of obligations, assets, income, and fund accounts. When you submit your case, you may also be required to provide tax documentation and evidence of certain accounts. If your financial documents are organized prior to filing, you can save time while pursuing your case.
Additionally, your most recent financial transactions will be examined. The court will consider your purchase history as well as any debt payments you have made. Any significant changes to your current debt or income levels could affect your bankruptcy eligibility and even the outcome of your case. For instance, reducing your debts or acquiring a higher income within six months of filing could disqualify you from eligibility. Conversely, accruing additional debt within months of filing could be viewed as suspect by the court. Prior to submitting a lawsuit, it is essential that you maintain a stable payment and purchase history. Ensure that your fund accounts and assets remain intact prior to filing. Attempting to relocate, sell, or conceal these items may result in a case dismissal or even bankruptcy fraud charges.
After A Discharge
Once your debts are discharged, you are in an exceptional position to assume control of your newly resolved debt accounts. This does not mean using your now-zero balances to make purchases, but rather adopting a new credit strategy. Specifically, the use of credit should serve as an instrument for reestablishing a good credit rating rather than for making convenient purchases. However, prior to even considering the use of credit, you should examine your financial behaviors.
Consider the information you learned in the course on credit counseling. Create a budget and categorize all of your monthly expenses, including those that are not essential. Assign your spending allowance per category and monitor your monthly purchases, taking care not to exceed your monthly budget. Ensure that you are actively saving money each month and start planning a few modest purchases on credit.
Ensure that your credit card balance does not exceed 40 percent of your available credit limit before making a purchase. Maintaining a balance below this level will ensure that you are establishing credit and not hurting your score. Make on-time payments and constantly monitor your accounts. After a few months of consistent payments, you may become eligible for a lower interest rate.""
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