Some people are forced into bankruptcy. A distressing event occurs. Their wages are garnished, a lawsuit takes them by surprise, their car is repossessed, home is foreclosed, or parking tickets result in a suspended license.
Most people go through a period of struggle, though. They are sitting on the verge of disaster and know that it is just a matter of time before it all collapses.
Should I file bankruptcy?
Should I wait?
Filing bankruptcy is a life-changing decision and it is not something anyone takes lightly. An excellent lawyer can tell you what your options are and advise you what is best for your financial situation, but they cannot make the decision for you.
Some people are cautious about filing bankruptcy because they are not sure of their future.
Will I be able to establish credit again?
What will happen to my credit score?
Obtain Free Credit Reports
The first step you should take before making any decisions is to get ahold of your credit reports. You can request a free credit report from each of the three credit bureaus - Experian, Equifax, and TransUnion - every year here. A lawyer can help you do this, as well. (One thing to note - if you apply for credit and are denied, you are entitled to the credit report that the creditor accessed.)
The next step you should take is to check your credit score. (Some companies will provide your score for free and others will charge you.) If your credit score is below 650, you will experience sufficient problems obtaining credit. If your credit score is less than 550, you will have a hard time obtaining any credit.
How Can I Prepare for Filing Bankruptcy?
Maybe you have yet to make your mind up about bankruptcy. That is okay. There are steps that you can take to prepare yourself for filing bankruptcy in the future. Here is what you can do:
- Find low-balance debts on your credit reports and pay them off as soon as possible.
- Dispute anything on your credit report that looks unfamiliar. If the creditor cannot prove the debt, they will be required to remove it from your report.
- Continue to monitor your credit reports for discrepancies. Create a budget and do your best to stick to it.
- If you do not have cash, do not spend it.
- Avoid Title Loan and Payday Loan companies (see #5).
- Set aside $5, $10, or $20 every time you receive a paycheck. It will add up quickly.
If You Want to Buy A Car
If you need a car, look for a used car on a modest budget. Use the internet to research the value of the car you want to purchase. Some companies will sell affordable vehicles to people who have bad credit. Just be careful - the interest rates on in-house financing for bad credit tend to be much higher than regular loans.
While You Are Considering Filing Bankruptcy
Keep in mind that most individuals and couples who file bankruptcy typically notice their credit scores increase. Shortly after filing Chapter 7, many of our former clients have been able to purchase cars. We have also received good news from past clients reporting they were able to purchase their own homes.
Are You Considering Filing For Bankruptcy?
If you feel bankruptcy is the best option for your financial situation you need to speak with an experienced bankruptcy lawyer as soon as possible. Please contact us online or call our office directly at 888.348.2616 to schedule your free consultation.