You probably thought that bankruptcy was something that affected other people. You had a good job, you paid all your bills on time. You even had a little bit of money left over each month to go and have fun with. Then the bottom fell out. You got sick, lost your job or had to file for divorce. Now you're facing financial ruin. You can't pay your bills and the creditors are calling non-stop. They may have even started calling your employer or your friends and family. If this sounds familiar, there are some things you need to know before you file for bankruptcy.
1. You'll need an Attorney
If you've decided that bankruptcy is your only solution, you're going to need an attorney. While there are legal proceedings that you can take care of without an attorney, bankruptcy is not one of them. Failing to fill the paperwork out properly, or missing a deadline could result in your case being denied. Don't take chances with your financial future. Hire a bankruptcy attorney to handle your case.
2. There will be a Court Hearing
You'll have to go to court, at least once. Before you panic, you should know that it will be a brief meeting. This is where your creditors have an opportunity to state their claim against you. In most cases, creditors don't show up. The judge will ask you questions and you'll be done. If you've hired an attorney, they'll be there to represent you.
3. You'll Take Some Classes
Before your bankruptcy can be discharged, you'll need to take two classes. The pre-petition class will make sure you've done everything you can to avoid bankruptcy. The post-petition class will help you learn ways to better manage your money so you can avoid bankruptcy in the future.
4. Some of Your Debt May Remain
If you thought that bankruptcy would erase all your debt, you may be wrong. Some types of debt cannot be discharged through bankruptcy proceedings. If you have the following debts, you will be required to continue paying them.
- Student loans
- Child support
- Criminal fines
- Federal taxes
5. You'll Get the Chance to Rebuild Your Credit
Once your bankruptcy is discharged, it will remain on your credit report for the next 10 years. During that time, you can begin rebuilding your credit. One way to begin rebuilding your credit is to apply for a secured credit card. With a secured credit card, your credit limit is established by the money you'll place in a savings account. Once you've made a pre-determined number of timely payments, your secured card can be upgraded to an unsecured card. Once your bankruptcy has been removed from your credit report, you'll have the fresh start you need.
If you've fallen on to hard financial times, it might be time for you to consider bankruptcy. Talk to your attorney about the options that are available to you.