No matter how prepared you may think you are, bankruptcy can still impact your business, family, and personal life. While it is a stressful and intimidating procedure to go through, it is better to look at it as a necessary step towards moving on from financial trouble. It’s will protect you in the long run.
If you have found yourself faced with a possible bankruptcy and are looking for some clear answers, here’s everything you need to know so you can move forward:
Hire a Lawyer
This is the most important tip we can provide you with and is one that we highly recommend you follow.
Handling a personal bankruptcy is incredibly stressful and nearly impossible to battle all alone. Despite the costs, bringing on legal help will ultimately give you a much better outcome than if you were to proceed alone.
During the bankruptcy process, your financial scenario is very vulnerable. When you hire a bankruptcy lawyer, you’re fostering a relationship with some that has experience dealing with your exact situation. They are prepared to commit to your unique situation and help you every step of the way.
Once you have hired on help, you need to establish who will be handling what. During the bankruptcy process, there are many loose ends that need to be tied up, and lucky for you, some law offices will take all matters into their own hands.
With that being said, ensure that you are part of the process and know how and when things are being completed. Don’t hand your legal matters over and then think you can kick back and relax. You want to make sure your finances are cared for.
Amount You Currently Owe
While the legal help you hire will be able to aid in this process, you will need to compile a definitive amount of what you owe and how far your debt extends.
When you are researching this amount, you must ensure to include all lines of credit that you have and the amount that has accumulated on each line. You must have documentation to prove these numbers and to use throughout the entire process.
Another tip regarding your lines of credit: We recommend that you contact each company that you are a part of to ensure that the credited amounts are correct and accounted for.
Additionally, some companies will offer a little leeway in certain circumstances. If you reach out to a credit company, and they see that you are faced with bankruptcy, there is a chance that they will offer forgiveness and excuse whatever amounts you may have owed.
While this happening is relatively rare, it is worth it to take the time and contact the companies from each line of credit under your name.
Length of Time
The biggest issue when facing a personal bankruptcy is understanding that it will impact you for years to come. Again, hiring on legal help early on is your best bet in having as smooth a process as possible.
When filing for bankruptcy, ensure that you know how long the report is going to affect your credit. It will likely be at least a few years before the bankruptcy can drop off of your name, so be prepared to take the time to rebuild your credit under different circumstances.
Additionally, bankruptcy will almost always impact your ability to go through with large purchases. Understand that buying a house, car, or any other large investment may prove to be incredibly difficult during this time.
It is not impossible to recover quickly, though it usually takes years to rebuild your credibility in the eyes of most banks and credit companies.
Overall, bankruptcies are not ideal. That being said, there are many circumstances in which they become necessary. If you find yourself facing bankruptcy, we highly recommend that you hire expert help to guide you through the process. You don’t have to go through this stressful and exhausting experience the right guidance.