People can find themselves at a point where there is no chance they will be able to pay off the debts they have accumulated. For example, consider someone who has depleted all their savings and maxed out all of their credit cards due to medical problems and losing their job. Even with unemployment or a temp job, they might find that they can no longer make even the minimum monthly payments on their cards or keep up with their rent and car loan. That’s when a helpful option is talking to a bankruptcy attorney. Chapter 7 could turn out to be the logical next move. For individuals who have declared bankruptcy, the recovery process is long and difficult. The first step comes when you and your court-appointed bankruptcy trustee meet with your creditors to inform them of the bankruptcy, at which time any nonexempt assets that you have must be liquidated. You will be allowed to keep your furniture, car, and personal belongings up to a certain value, but any nonexempt liquid assets, such as cash or certificates of deposit (CDs), must be turned over to your trustee. However, liquidating your assets is only the first of many issues that must be dealt with as the consequences of your bankruptcy unfold. Getting a loan of any kind will be extremely difficult for the next couple of years. It may be possible to regain a better credit score and qualify for some types of loans after only a year, but the lenders that will take you on will probably be from finance companies that charge exorbitant rates of interest. In some cases it may not be possible to get credit at all for major purchases, such as a car or home. A Chapter 7 bankruptcy will remain on your credit report for 10 years. If you file a Chapter 13 bankruptcy instead, the bankruptcy should disappear from your credit report after only seven years. With Chapter 7 your trustee uses the liquidated assets to pay off as much of your debt as possible, after which the rest is discharged. Chapter 13 requires that you pay back all of your debt within three to five years according to a set payment plan that must be approved by the court. If you are in a position to put forward a credible plan, Chapter 13 is often preferable, because it allows you to save your home from foreclosure. How to Recover After Filing for BankruptcyHere are a few steps that you can take to help regain control of your situation. Maintain a job and a homeIt is vitally important that you get and keep a job as soon as possible, if you don’t have one already. Finding a good place to live ranks a close second, if this is an issue. Stable residential and employment histories are necessary because they show creditors that you are reliable. A growing number of landlords are checking credit references as a means of screening out possible unreliable tenants. If you are not able to rent an apartment, you may have to room with a friend or relative until your credit improves. Employers may also request credit scores and histories of their potential applicants as a measure of personal responsibility. A spell of bad luck can fuel a vicious cycle that may prevent you from getting a job that pays enough for you to pay off your debts. Do what you can to push forward anyway and find a job that can be the foundation of putting the bankruptcy behind you. Pay your billsIt is imperative that you stay current on all of your monthly bills and other payments so that your post-bankruptcy credit record stays clean. There is absolutely no room for even the tiniest amount of backsliding in this regard. This means that you must be extremely watchful of every expenditure so that your expenses don’t build beyond what you can afford to cover. Keep a bank balance Know Why You Filed When Should You File For Bankruptcy? Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
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8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
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