Bankruptcy Survival Tips

With speculation rife that the US is heading for a double recession, many people are contemplating filing for bankruptcy protection. If you are burdened with debt and considering bankruptcy, it would do you well to consider what bankruptcy really holds for you. On one hand, bankruptcy protection is not the end of your financial life; on the contrary, it could be your financial life saver. But on the other hand, filing for bankruptcy can be a rough ride.

I’m going to be upfront and tell you the real deal behind bankruptcy and how to survive a bankruptcy filing.

They say the best remedy is prevention. Here’s a tip that can possibly help you avert a bankruptcy filing. Go for credit counseling classes (something you will eventually have to do after filing for bankruptcy anyway). If you go for such classes before filing for bankruptcy, you will learn useful debt management tips that might help you prevent bankruptcy.

Bankruptcy is the best way to clear your unsecured debts like credit card bills, medical expenses, phone bills and any loan that is not backed up with some collateral. But the downside to that is filing for bankruptcy will adversely affect your credit rating unless you do something about it. Here’s what you should do.

Completely pay up one or more of your credit cards before filing for bankruptcy. You may need to raise some cash to pay off your card by liquidating some assets that have fewer consequences. Do it, because by bringing your card balance down to zero, this card will not be listed as one of your creditors and hence, even after filing for bankruptcy, you can keep the card to build up credit at a lower interest rate than you could possibly get after bankruptcy.

Here’s another tip to help you protect your assets from creditors. Before filing for bankruptcy, do not deposit any money at the banks where you have credit card or loan accounts. They can seize your deposits if an account goes delinquent, as yours is about to.

However, bankruptcy is not the panacea for all your financial ills. Bankruptcy will not clear away secured debts like your house, car or anything that has a lien on it. But don’t worry, if you have been making your payments (at least partially), chances are you won’t lose these important assets when you file for bankruptcy. Also, even though you file for bankruptcy you will still need to pay alimony, child support, student loans, income taxes and the like as these are financial obligations given protection under the law.

If you like these tips and want to find out more about how to survive a bankruptcy, discuss your situation with an experienced bankruptcy attorney. The bankruptcy process is getting more complex so it is advisable to seek legal counsel. You should be wary of bankruptcy specialists who charge high fees. Call us at (813) 200 4133 for a free consultation.

Related Blogs