Dealing with creditors’ calls and intimidations can be frightening and stressful, to say the least. If you are struggling with debt, one of the options you can consider is filing for bankruptcy.
However, it is important to understand that bankruptcy is a legal process. As such, it is in your best interest that you prepare before getting started. Here are three helpful tips that can help you prepare for bankruptcy.
Stop incurring further debt
Borrowing money when you have set your eyes on bankruptcy is never a good idea. In fact, the court will look back at least two months to find out if you are still incurring debt. If you absolutely have to take out credit for, say, lifesaving medications, rent, gas or food, be sure to keep a record of those borrowings. Do not incur debt for non-essentials.
Begin working on your recovery plan
Bankruptcy will remain in your credit report for a while. And due to its impact on your score, you may only be eligible for low-limit credit cards in the months after your case is closed. However, as you rebuild your credit, your limit will rise once more. It is important that you start working on a credit recovery plan proactively.
Sign up for credit counseling
You will be required to sign up for mandatory pre-bankruptcy credit counseling before your bankruptcy petition can be processed. The agency offering this program must be certified by the U.S Trustee Program office. It is important to note that your petition for bankruptcy will be denied if you fail to sign up for credit counseling before submitting it to the court.
Bankruptcy can offer a welcome relief when you are struggling with debt. Find out how you can file a successful petition for bankruptcy by seeking legal guidance.