Filing for bankruptcy becomes a viable option when an individual’s cash flow is “upside down” with no reversal in sight. But before proceeding, it’s important to first look at the structure of one’s assets and liabilities. For many homeowners, an experienced and qualified mortgage professional may be able to help them restructure debt and avoid bankruptcy altogether.
If this isn’t possible, then it’s critical not to let negative cash flow go on for too long. Instead, quickly seek references for a reputable bankruptcy attorney and a credit counselor. One of the worst mistakes consumers make is to borrow more money in an attempt to pay off debts.
When declaring bankruptcy, it is important to be very accurate and honest in one’s filing, especially when it comes to any recent changes in income. Remember, a bankruptcy hearing is a federal proceeding, complete with courts, judges, and representatives who coordinate with the Department of Justice, the FBI, and the IRS.
During the proceeding, homeowners should develop a budget and try to live below their means. They should use this time to save cash as well as examine the causes of their bankruptcy. Also, they should keep organized, saving all their paperwork and taking note of their discharge date. Having this information on hand will prove extremely useful in the future.
Once the bankruptcy is final, it’s time to begin rebuilding credit. Secured credit cards are an excellent place to start. This is also a good time to hire a reputable credit repair specialist who can offer advice regarding the best ways to re-establish credit. There is definitely life (and credit) after bankruptcy. The trick is to get the help and advice you need from professionals you trust. Contact us for a referral to a professional bankruptcy attorney.