It is obvious to assume that there is some nervousness that you will feel about what happens after bankruptcy, if you’re considering filing for bankruptcy. The process that takes places after filing for bankruptcy is dependent on whether you file for Chapter 7 or Chapter 13 bankruptcy. Each case is different .The surprising fact is that many people are able to get their life back on track. Your credit may not be strong shortly after filing bankruptcy. You can get the facts about what your situation means by speaking with a local bankruptcy attorney.
Below are some post bankruptcy signs which one should know before filing bankruptcy
• There will be flood of unscrupulous creditors with offers of low-balance credit cards to help you regain your credit after bankruptcy. Many of these offers unfortunately come with membership fees and activation fees that could push you near your credit limit and then over-the-limit charges and late charges will follow, putting you right back where you started: in debt and with late payments on your credit. So choose your new credit accounts with care. There are various reputable lenders who will give you a chance to re-establish credit after bankruptcy but don’t get so eager that you abandon your better judgment.
• You won’t immediately be able to qualify for most conventional car loans, mortgages after bankruptcy. However, for most people who file bankruptcy and then pay their bills on time, those loans will be within reach 2-3 years after discharge. So while bankruptcy won’t be able to help you get a new big loan but it can help you achieve good credit standing in a fairly short period of time.
• You may see a higher interest rate for your first few credit accounts or loans. Those rates are dependent on your three-digit credit score and those scores will be low right after bankruptcy. Bankruptcy may clear your debts, but it won’t clear your credit history. However, negative items on your credit typically have less impact as they age. Your credit score can quickly rise to good and even strong levels if you replace them with more positive, recent items.
• The burden of debts you can’t pay will be wiped out after you complete your bankruptcy. Most people experience a great feeling of relief at finally achieving that fresh financial start they needed so much. The lessons you have learned will be valuable for your future success. You must know that the ways you handled money need to be changed. And the credit counselling you received during bankruptcy will have given you new abilities to do better with money.
Your credit was probably weak before you filed bankruptcy and it will be weak immediately after. You’ll have the opportunity to start to rebuild your credit without those old debts hanging over your head. In time, if you handle those early accounts carefully, your credit can be stronger than it was before you filed and you’ll begin to see not only more credit available, but lower interest rates and more favourable terms.
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