The decision to file a chapter 7 bankruptcy is not one to be made in haste. It pays to discuss all possible options with an attorney first, and proceed only if this is truly the most practical solution to overwhelming financial issues. Even after becoming resigned to the fact that bankruptcy is the only solution, there is still some concern about what will happen in the future. Here are some things the debtor needs to know about the months that will follow that filing.
Finalizing the Bankruptcy
A chapter 7 bankruptcy does take a few months to complete. Creditors must be provided the opportunity to respond, and any assets the debtor has that the court considers eligible must be sold and the funds distributed to the creditors. During this time, the debtor must be ready to provide answers to any questions posed by the court-appointed trustee. In the best case scenario, there will be no complications, and the debt will be discharged after a few months.
The Credit Rating
Expect the credit rating to drop after the bankruptcy is filed. For many people, this will not make much of a difference, since the rating was already in poor shape prior to the filing. As the months pass and the debtor does not carry new debt from one month to the next, the ratings by each of the major credit reporting agencies will begin to increase. In a year or so, the ratings will be better than they have been in a long time.
Getting Credit
One area where the debtor must be careful is accepting too many offers of credit from lenders. They know that it is not possible to amend or file a new chapter 7 for a number of years, which makes them more willing to offer the credit, usually at higher interest rates. Resist the temptation to secure many new credit cards, but do identify one offer that comes with reasonable terms. Use the card, but pay off the balance each month. Doing so will motivate the issuer to increase the credit limit and provide the debtor with a resource to use in an emergency situation.
For anyone who wonders if bankruptcy is the right solution, visit website today and schedule an appointment. Doing so may be the first step toward resolving the financial issues and getting things back on track.
