What You Need To Know About Bankruptcy
Are you a shopaholic? Regardless of whether you like to shop online or in person you makepurchasing decisions before you have the chance for a second thought. All of the purchasing power available through credit cards, added to your left over student loans, a car loan and home loan has left you much more in the hole than you’d ever imagined. You’ve actually started to consider filing for bankruptcy to give you a new start and get you back on the right track financially.
The Myths of Bankruptcy Law
Bankruptcy isn’t something you want to mess around with. It is a complicated matter and you should get as much knowledge as you can before proceeding to file.
First, there are some myths about bankruptcy that you should know.
- Irresponsibility leads to bankruptcy. This may make you feel bad about yourself or your spending habits but as you know, not everything is under your control. Sometimes a divorce, illness or loss of a job can cause things to get out of control and cause unusual and unwanted spending and stress.
- Additionally, many people who file for bankruptcy expect to be completely free of all past debts and able to start over completely. However, there are certain debts that filing for bankruptcy can’t even erase. Some of these debts are:
- Domestic support obligations
- Restitution for a crime
- Student loan debts (at times)
- Tax debt (at times)
- You can spend whatever you want right before filing for bankruptcy and won’t have to pay it back. This is false because running up your credit cards before filing for bankruptcy is considered fraud and fraud is not excused during bankruptcy.
- Bankruptcy will forever ruin your credit. This is also a misconception. After the bankruptcy settlement has been completed you may start getting credit card offers again within a few months.
At first they may be secured cards with a low amount of credit and immediate repayment required, but if you do well within the first few months you will be able to shed the secure cards as you start getting new credit card applications in the mail.
How to File for Bankruptcy
If bankruptcy is your only option then you should make sure to do your research to make the most informed and the best decision for you.
You also need to make sure you find the best attorney to handle your bankruptcy case and go over the best options for you. Your attorney should help you prepare for your initial credit consultation. Your creditor should also help you prepare for communication with your case trustee.
Once you have filed for bankruptcy it is time to liquidate your assets to distribute to creditors so that it can be erased and taken care of and you can start over. Finally, you should learn how to correctly rebuild your credit and budget your money successful for years to come so that you can better control your spending and savings.