Understanding Bankruptcy

Maybe as a single mother you have had to file bankruptcy.  Don’t feel ashamed about it.  You may have done it so you can get on your feet and be able to get a fresh start.  There are many things to consider when you are going to file for bankruptcy; this will help you be able to know what you can do afterwards along with what you may need to do afterwards as well.  There are things to think about before you just go out and file for bankruptcy.  You will need to remember that it will be on your record for 7 – 10 years based on the type of bankruptcy you are applying for.

It is important to have done everything possible to take care of all the debt you owe.  This may be working out payment plans other than what they are asking for.  If possible see if you have family or friends who can help you.  But the most important is too not getting the credit cards and use them for just anything.  Use the credit cards as an emergency help if you really need them.  Also, don’t take on more debt than you can really take care of with what you make from your paycheck.

Understanding BankruptcyThere are two types of bankruptcy for individuals.  There is Chapter 7 and Chapter 13 Bankruptcy for individuals.  Chapter 7 bankruptcy is when the creditors will just have to write off your accounts.  You only keep the things that will help you get to and from work or so you can work.  Then you get to start all over.  Chapter 13 is getting and taking what you have to pay off the debts that you own.  You will have 5 years to pay them back and the courts make sure that this is done.  Then you get to start all over.

It is important to know that you will have to go through credit counseling of some sort.  The states may say what it needs to be or depending on the lawyer you use, will determine what your counseling will be.  The counseling is usually in two parts.  You will need to have the certificate printed off to give the lawyer for your file.  The judge at the court may or may not need to see it, but having it in case it is requested will be important.  Also, whatever the lawyer says you need to provide, make sure you do that.  The sooner you get everything into them and pay the lawyer, the sooner the process for either of the bankruptcies will be able to take place.

You also don’t want to use just any lawyer to help you with the bankruptcy.  You want to make sure they specialize in bankruptcy.  They also need to have a proven record.  You want to see what they charge, but don’t necessarily go with the one that is the cheapest either.  By knowing what each of them can do and what they are saying will help you know where to go. Once you know who you will be using they can help you know which bankruptcy will be right for you.  They will even be able to help you know the process for both and understand what is necessary for both.

Once your bankruptcy goes through, if you need to make major purchases, you will need to have someone co-sign with you to help get your credit going.  But you will want to make sure you are making the payments.  This will help you repair your credit and you don’t want to hurt the co-signers credit either.  It is usually suggested that you way about 6 months before you do this.  Your school loans, if you have them cannot be written off in bankruptcy.

Bankruptcy may be what you need to do to help you get back on your feet.  If so, don’t be discouraged.  But be willing to learn from it and do better.  Watch what you do financially from that point forward.  You don’t want to get in so deep you don’t look forward to the phone ringing, but you also want to not be stressing about what is going on financially either.

Leave a Comment