Is there life after Bankruptcy?
Yes, there is. In this economy many families have to make that decision. I personally had to file for bankruptcy 7 years ago. This was due to a car accident and separation with my now ex-husband. During the separation he wanted our new car. The car was only a year old. Since he took the car I assumed he would pay for the insurance. The car was in both our names. He did not keep up with insurance payments and I was unaware of his lack of payments. He got into a severe car accident due irresponable reasons. In one night, I was in debt over $20,000. Since we were in a separation I still owed money to this car. It was part my debt. I had a choice, to either pay for a car that was totaled and could not drive anymore or file bankruptcy. (We had other pending credit card debts) I was young and I decided to file Chapter 7.
Now this was several years ago before bankruptcy laws took place for Chapter 7. I got lucky. Today you still have to pay back your debts. I got everything wiped clean but in return a horrible credit rating. At the time, my credit rating was bad. I thought what's the difference? There is a slight difference. You can fix old past due debts and have your credit score bounce back in a few months. With a bankruptcy, you have 7 to 10 years of "bad credit". You are a risk. I was a risk, even though I was not the one who totaled the car and didn't make the insurance payments. I learned that if your name is on it, protect it.
Today I have a fair credit rating. On my credit report still lurks that old bankruptcy. Even after 7 years it's still there. I have three more years till it fully drops off. How did I get my credit rating back up and have credit cards today? The solution is easy, the task it's self is hard.
To get yourself out of debt you need to set goals. You need to save and you need to make a budget. First, look at your monthly income. Second, look at your top debts; mortgage, cars, insurance, utilities, food and gas. This is your basic living needs. Everything else is options. Subtract your income from your top debts and see how much you have left over. Put aside a small amount per week for "extra spending". I put $50.00 for two weeks. This is for coffee, lunches, a movie rentals or what ever I want to spend it on. The rest goes towards your pending debts. Even if it's $20.00 per month, it's something. Any extra income, like tax returns, all goes towards debts. You will get out of debt faster this way. You have to make choices on wants and needs. Your spending habits have to change. Anytime you see something at the store ask yourself "Do I want this or do I need this?" Most often the answer is want. If you want it, don't buy it.
After bankruptcy you can't get credit cards and you'll have a hard time getting loans. One thing you NEVER do is get a credit card where you have to pay them an annual fee or any upfront fees. This is a huge scam and you will never fix your credit. A good credit card company will never ask you to pay upfront. You are either accepted or denied. Read all information on interest rates, late fees, etc. Don't apply for a high interest credit cards. It's a waste of your time and all they do is take your hard earned income. Cash is the only true way out of debt. Pay for everything cash or through a Visa/MC card attached to your checking account. I did this for 5 years. If I needed a new car I had to get a co-signer. I drove my old truck with no payments for years. I had a roommate and we co-signed for an apartment. Some apartment facilities don't mind bankruptcies. Some do. You have to research and be honest. It can be embarrassing but its life.
Once my credit scores started going up I wanted to increase my rating and prove I can pay my debts. I started out with one department store credit card. Normally department stores will accept previous bankruptcies with a certain amount of year's in-between. I started out slow and only had a limit of $200.00. That's all I needed. You buy one or two items and then pay your card off at the end of the month. If you can't pay off the credit card at the end of the month, make payments above the minimum monthly payment. This is the only way to lower your balance. NEVER pay the just the minimum balance. You will never get your card down to a zero balance. After 6 months I got an increase of $300.00. I was excited! My credit was building and I was proving I could pay on time. Pull your credit report every year and look to see if everything is correct. You can call and get items removed. Keep copies of everything you pay or pay off. You never know if a debt collector will call you for an old debt. You need to prove you paid it off. I now have 4 credit cards all with low balances. (keep your open credit high and debt low) Read articles on how to save your credit. Once you follow these basic steps you will be debt free and have a great credit score again!!
Jennifer-Mixed Nuts Mommy & Aww Natural Baby
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