Filing for bankruptcy, though tough, is a smart decision to overcome your financial problems. However, as lawyers of Sacramento based law firm Recovery Law Group inform, debtor’s need to make these changes in their habits to avoid filing for bankruptcy again: (more…)
Tag: Bankruptcy filing
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How to know it’s Time to Consider Bankruptcy?
Misfortune can happen to anyone, at any time. It is important to keep a steady head and look for the best possible solution to your financial troubles. Unfortunate circumstances can cause even the most responsible person to go through a bad financial period. An unexpected long illness, job loss, or expensive divorce can derail even the best people financially. In case you too are going through such a phase of financial struggle and are wondering whether it is time to file for bankruptcy, Sacramento based law firm Recovery Law Group provides you four signs to identify the problem and consult a bankruptcy lawyer.
Clearing Your Debts Using Your Retirement Funds
Your retirement funds are supposed to be helping you in your old age. If you have to dip your hands in this corpus to pay off your debts, you are essentially depriving yourself of a comfortable old age. In case you are considering or have gone ahead with early withdrawal from your retirement funds, things are more serious than you thought. Paying off your loan by using your retirement funds will hurt you in the long run.
Your Balances Refuse to Go Down
Despite making continuous payments with respect to your debts, the amount due is not getting reduced. If the amount you are repaying is merely covering the interest portion of the debt without making any change on the principal amount, you need to consider bankruptcy. If you are unable to fully pay off your debt within 3 years, it would be best if you consult an expert for legal advice regarding your debts.
Family Will End up Suffering if You Don’t File
Managing your debts and caring for dependents of your family can be not only emotionally and physically but also financially draining. If you are finding it difficult to manage both worlds, it is recommended to take care of your debts by filing for bankruptcy. Not only it helps you get rid of your loans, but it also allows you to get a fresh financial start so that you can effectively take better care of your family.
Your Mortgage is Under Water
If you are way over on your debts, your home, and other property might go under water if adequate steps aren’t taken soon. Bankruptcy can help you take care of the above-mentioned problems as:
• It can help wipe out any debt due after foreclosure.
• It can remove a home equity loan or second mortgage.
• It can help remove financial stress and assist you in making on-time payments or obtain loan adjustment so that you can retain your home.
• It can help reduce your debts to make money available to make the mortgage payment.
• Large tax bills due to the cancellation of debt income can be avoided.Every individual has had their shares of financial issues, the circumstances of which may differ from one individual to another. Indicators of financial problems and debts might vary, but it is important to understand the subtle signs and seek help from professionals on time. consulting a bankruptcy lawyer if you face any of the above-mentioned signs is important before things spiral out of hand and you encounter trouble making payments or your income starts getting affected.
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The Best Way to Rebuild Your Credit Score after bankruptcy
Sometimes, one bad decision can be just the start of many such similar ones. Before you know it, you have amassed a bad credit score and huge loans which you have no means to pay off. This invariably leads to filing for bankruptcy which may seem like the end of the world. However, things couldn’t be farther from the truth as bankruptcy offers you a chance to wipe your slate clean. You could get rid of old debts which kept your credit score down and get a fresh financial start to rebuild your credit score.
Bankruptcy and its Effect on Credit Scores
A credit score is a concise way to show lenders your financial position, i.e. how much risk it would be to loan money to you. A high credit score means your debts are paid on time and on a regular basis, whereas a lower credit score means that you are irregular in making payments. It is, however, incorrect to assume that filing for bankruptcy will end up lowering your credit score permanently. Bankruptcy can cause a temporary drop in your credit score. You can use a number of tips to rebuild your credit score.How to Rebuild Your Credit Score?
As per Sacramento based law firm Recovery Law Group, the primary step needed to improve your credit score is to know your credit standing. For this, you need to obtain your credit score copy from any of the major credit reporting agencies. Checking for any errors is essential, such as any debt which should be discharged by your bankruptcy, contact credit agency and get the issue resolved. Stick to basics when it comes to basics, like don’t spend more than you can afford to, pay your bills in full and on time, including debts which were not discharged by bankruptcy (student loan payments).The biggest mistake people can make after bankruptcy is to avoid credit altogether. Though initially, it may seem like a bright idea to steer of any new debts, this won’t be of any help to rebuild your credit. Instead of completely avoiding credit responsibility, take it in small steps. The easiest way to do this is to take advantage of a secured credit card which reports to one of the top 3 credit agencies and make regular payments on time. Paying off entire balance monthly helps avoid making interest payments apart from showing lenders that you aren’t a credit risk anymore. Regularly doing the same can lead to a drastic improvement in your credit score.
Other methods of getting better credit score comprise of getting a new bank account or applying for a gas card. Paying for gas for your car through this card helps rebuild your credit score as it is one of the regular purchases. Signing up for automatic bill pay ensures that all your bills are paid on time, thereby improving your credit score.
The most important aspect is not to lose your patience during the entire process of bankruptcy. Though these are trying times, ensuring that you keep making regular payments and develop good financial habits will go a long way in improving your credit score. Make regular credit score checks and soon your ratings will increase with time.
Bankruptcy filing offers a chance for people to not just wipe off their dischargeable debts, start fresh and improve their financial condition. By taking appropriate steps to fix your credit score you can finally breathe free. Consult bankruptcy lawyers to help you guide through the process and inform you of all options.