The Stress of Bankruptcy
So you’re faced with a bankruptcy. This is a very stressful and confusing time for many Americans, you are not alone. What can be better than handing your bankruptcy problems over to an experienced bankruptcy attorney who has the ability to resolve those problems? Read our testimonial page to see what REAL bankruptcy clients have had to say about their experience.
Bankruptcy has changed:
Many people file for bankruptcy after a life-changing experience, such as a divorce,
the loss of a job, or a serious illness.
The number of people filing bankruptcy has increased over recent years, the economy being an obvious factor. Given the increase in volume, bankruptcy no longer has the stigmatism it used to have in society.
Bankruptcy is a solution created in order to help good people get through a bad time and give them a fresh start.
Many famous people have filed for bankruptcy:
- Donald Trump
- Walt Disney
- Mike Tyson
- Abraham Lincoln
- Larry King
- Gary Coleman
- MC Hammer
- Meat Loaf (singer)
- Burt Reynolds
- Anna Nicole Smith
Bad credit won’t last forever:
A bankruptcy can remain on your credit report for up to ten years; however, that doesn’t necessarily equate to ten years of bad credit. Although the bankruptcy will stay on your credit report, you can start rebuilding your credit immediately after your debts are discharged. Staying current and making full payments on your debt is one effective way to start building your credit while you are still in the bankruptcy.
Once you can show creditors that you have what it takes to build a good credit score, your bad credit will start to improve. The process of rebuilding credit will require charging only what you can afford and paying your bills promptly and regularly. During this rebuilding period, try to avoid taking on too many credit cards, and if possible avoid them altogether. It can get hard to manage balances and payments. Using cash, during this period, can help you learn to manage your money and prevent you from falling back into debt.
Fear of hurting already bad credit scores:
If your credit is already bad, filing a bankruptcy can’t make it much worse! While many people are concerned about the potential damage to their credit after filing for bankruptcy, in reality it can only help your already poor credit. Having a low credit score on its own is stressful enough. Add debt into the equation and it becomes a nightmare. Rebuilding your credit with debt to your name is a difficult task; through the discharging of your debts, bankruptcy can provide the fresh start you need. After a bankruptcy, there are many things that can be done to rebuild your credit, especially keeping current on all other bills and payments.
Yes, you can eventually finance a car.
A car loan after a bankruptcy is one way to help rebuild your credit history. In fact, you can even apply for a loan the day after your bankruptcy case is closed. While you will not receive the best rates in terms of the loan and interest, it is still a great step toward rebuilding your credit especially if you need a car anyway for work or school.
Car loan applications will ask if you have ever declared bankruptcy. This is your chance to explain what led up to the situation and what steps you have taken to resolve your credit situation. Be sure to include improvements in your financial history too. Once you are approved for a car loan, keep your eye on future refinancing. By making regular payments on all your bills, in a year's time, you could qualify for significantly lower interest rates. Continue making regular payments and you can build your credit score and qualify for lower rates.
Yes, you can eventually get a loan for a mortgage.
After bankruptcy, if you have kept up with your payments promptly and consistently, you might be able to get a mortgage in about two years. While it is possible to get a mortgage before this two year period is up, it is often unlikely and undesirable, since creditors want to see that you are trustworthy. Tardiness on just a few payments can result in a denial. Also, your terms (such as your interest rate and a down payment) will surely be much higher and less attractive than they would be if you wait. Considering you will be paying the interest rate on your mortgage for up to 30 years, it definitely saves you a lot of money if you can wait long enough after the discharge to get a good interest rate.
Changing your credit Habits:
Anyone who has gone through bankruptcy knows it's not something you want to do more than once. In order to avoid ending up back at bankruptcy you must learn from the past mistakes and replace old credit-damaging habits with new frugal ones. This means improving your credit score by paying your credit card bills on time, only charging things you can afford, and never skipping payments. These new habits will provide you with a fresh start to a bankruptcy free future.
Keep in mind: "THIS TOO, SHALL PASS".
Ronald S. Cook is a Bankruptcy Attorney that proudly serves New York City, Manhattan, Nassau County and Suffolk County on Long Island, New York, NY. We offer reasonable rates and payment plans. CALL US TODAY AT 631-265-0102 or EMAIL US FOR YOUR FREE BANKRUPTCY REVIEW.