Getting Ready to Declare Bankruptcy

Declaring bankruptcy can be an intimidating, frustrating and demoralizing process, but when you understand how the process works, and what you can get out of it, you may begin to realize that it can be a helpful procedure that will get you back on your financial feet sooner than you may think.

One of the more common misconceptions that people have about declaring bankruptcy is that they will lose everything including their home and cars. The truth is that you can work with the bankruptcy court to declare some of your possessions not part of the bankruptcy. Some items are exempt by law such as student loans, but you can work with the courts to exempt your home and your cars. Talk with your lawyer about applying for a bankruptcy proceeding that does not leave you homeless.

Another common misunderstanding about bankruptcy is that you will have to wait 10 years to be approved for any kind of credit account. This is something that prevents many people who had filed bankruptcy from moving on. You can apply for secured credit accounts as soon as your bankruptcy is final. As long as you continue to pay on your exempt accounts, and keep up your balance on your secured credit card, your credit score will start to rise. Over the span of two or three years, it is not out of the question to go ahead and apply for a mortgage or a car loan again. You may need a cosigner your first time around, but if you keep making your payments your credit outlook will continue to improve.

There are many misconceptions about bankruptcy that keep people from filing for it when they really need to. Talk to a bankruptcy attorney and learn the facts about bankruptcy and decide if it is the right move for you and your family. Bankruptcy is a process created to help consumers get back control of their financial lives. When you use it the way that bankruptcy was intended to be utilized, it can be a financial tool that helps you recover from the darkest times in your life.