In the past, bankruptcy has had a negative reputation, but in the current economic climate, it provides debtors with a much-needed fresh start. People are given optimism by bankruptcy; it is the light at the end of a very dark tunnel. If you have out-of-control debt, you are likely intimately familiar with the high levels of stress associated with having expenses that you cannot pay.
Filing for bankruptcy does not mean that you can never obtain credit again; you can still obtain an auto loan and purchase a home within ten years. Although bankruptcy remains on your credit report for ten years, you may still have access to a variety of lending options despite having filed for bankruptcy. In fact, you may be a more desirable creditor after declaring bankruptcy, as your debt-to-income ratio will be lower or nonexistent compared to if your credit cards were maxed out and you were overextended.
After a debtor files for Chapter 7 bankruptcy, non-exempt assets are liquidated to repay creditors, and any remaining unsecured debt is discharged. In many instances, the bankruptcy is a ""no-asset"" bankruptcy, which means that the debtor has no non-exempt assets and therefore gets to retain everything. In this instance, unsecured debts are discharged without the necessity of liquidation.
Whether the debtor files for Chapter 7 or Chapter 13 bankruptcy, they will receive immediate relief from the ""automatic stay,"" which stops all debt collection activity. It suspends all repossessions, foreclosures, and wage garnishments. The automatic stay prohibits creditors from contacting you via telephone or mail.
Separate from Chapter 7 bankruptcy, Chapter 13 bankruptcy is a debt reorganization plan. Those who earn too much to qualify for Chapter 7 bankruptcy are directed to register under Chapter 13. The debtor's expenses are reorganized into a monthly payment that they can easily afford under Chapter 13. These payments are spread out over three to five years as part of a repayment plan known as Chapter 13. In both Chapter 7 and Chapter 13 bankruptcies, the filing party promptly enjoys the benefits of the ""automatic stay.""
After your Chapter 7 or Chapter 13 bankruptcy is discharged, you will have the opportunity to rehabilitate your credit. The Chapter 7 bankruptcy is the quickest and simplest of the two. The majority of petitioners receive their discharge within four to six months. The months promptly after a bankruptcy are crucial for reestablishing credit. When prospective lenders review your credit report, they want to see that you are concentrating on reestablishing good credit following bankruptcy. A potential lender would prefer to see ""good credit"" on a debtor's credit report after a bankruptcy discharge, as opposed to nothing.
After a bankruptcy, you may want to wash your hands clear of credit cards, but this is not the correct mentality. It would be a grave error not to establish credit after being discharged from bankruptcy. There are several credit card companies that offer credit to individuals who have recently filed for bankruptcy. If you search for credit cards online, you can compare interest rates and annual fees to determine which card meets your needs the best.
After bankruptcy, it is highly recommended that consumers obtain three credit cards. It is imperative that you do not exhaust out your credit cards. It is best to charge a modest amount, between 10 and 20 percent of the credit line each month, and pay it off in full each billing cycle. It is a good idea to charge items such as gasoline and groceries that you would typically purchase anyway. After using a small quantity of credit each month and paying it off in full each month, you will begin to rebuild your credit rating. This is necessary if you want to restore your credit following bankruptcy.
After a year or so of on-time payments and maintaining a negative balance on your credit cards, you should be eligible for lower interest rates and credit cards with no annual fee. It is essential that, after bankruptcy, you avoid the pitfalls that lead to your bankruptcy filing in the first place.
Live within your means, and create and adhere to a firm budget. It is crucial to maintain steady employment and avoid frequent relocation. If you are able to retain your job and residence, it will demonstrate stability to potential lenders. It is not impossible to rebuild credit after bankruptcy; in fact, it is simpler than it may seem. After filing for bankruptcy, it is possible to regain financial stability and a decent credit rating through diligence and self-control. Contact a bankruptcy counsel immediately for more information about filing for bankruptcy and life after bankruptcy!""
" - https://www.affordablecebu.com/
