1.41 million Americans filed for personal bankruptcy in 2009, a 32% increase over 2008. For many of these Americans, bankruptcy was a necessary choice, but they should remember that it is only a single step. The actions they take after the bankruptcy are just as important towards improving their financial lives and getting back to a higher credit rating. If you are interested in filing for bankruptcy and you would like to learn more about rebuilding your financial life following the bankruptcy, a Washington DC or Maryland bankruptcy lawyer at the law firm of Kevin D. Judd can provide you the experience and expertise necessary to make the right decision.
Getting in Trouble after Filing for Bankruptcy
A bankruptcy can be a great opportunity for a debtor to fix his or her past financial mistakes and make a change for the better. However, too many people that file for bankruptcy fail to learn from their mistakes. The following are some common mistakes that people make:
- Not following up on their credit reports. After you file for bankruptcy, the credit bureaus should report all the debts that were included in the bankruptcy. Often times, one of the bureaus do not properly list a loan or account as included in the bankruptcy. As a result, it will still appear as if the debt is in collections, which can hurt your credit history. Make sure that all three of your credit reports are error-free.
- Not making efforts to re-build their credit. In the short run, a bankruptcy has a big, negative impact on your credit score. As time goes on, however, its impact will lessen, and this will particularly be the case if you consistently demonstrate that you can use credit responsibly following the bankruptcy. Obtain secured credit cards (those where you provide the bank cash so that your credit limit will never exceed money that you have already given to the bank). Make sure the bank reports the credit cards to the three bureaus so it can have a positive impact.
- Failing to live on a budget. A bankruptcy should be a wakeup call that tells you that you need to manage your finances better. Speak with financial experts and read up on how to improve your personal finances and budgeting. Learn what your expenses and income are exactly and then cut back on non-essential items, only adding them back in when you are sure you have plenty of spare money.
- Making illegal transfers. Generally, people get in trouble for transfers they make just before they file for bankruptcy. They then file for bankruptcy and the court and bankruptcy trustees learn that items that would normally count as assets that could be used to pay off creditors are suddenly in someone else’s name. Transfers around the time of a bankruptcy filing raise red flags. They may be crimes themselves and they are likely to void bankruptcy charges of debt.
Filing for bankruptcy is a big change for a person and can be a great chance to move forward if the debtor makes the right choices. If you are considering filing for bankruptcy and want to learn more about life after the bankruptcy, contact a Washington DC bankruptcy attorney at the law firm of Kevin D. Judd.
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