Filing for bankruptcy can be scary. You may be harassed by creditors, face shutoff notices, or have seizure notices for your house or vehicle. Knowing what to do to survive during this trying time often makes all the difference. Here are five tips to keep in mind.
Reaffirm Debts You Plan to Keep
If you plan to keep on paying your mortgage or vehicle payments, contact your lender immediately. Let them know that you are undergoing a bankruptcy but intend to honor your obligation. Some financial institutions may ask you to sign a letter of reaffirmation, while others will simply tell you to keep making payments. This will avoid any confusion about your home or transportation. Talk to your bankruptcy lawyer if any creditor expresses hesitation about the process.
Inform All of Your Debtors
While some bankruptcy lawyers will do this for you, contacting your debtors in person can help stop threatening calls and letters. Most of the time, your debtors will deal directly with your lawyer. Should they refuse to do so, don't allow yourself to be frightened by threats. Do not accept abusive language or 'scare tactics' used against you.
Draw Up a Budget
Don't let your bankruptcy stop you from forging ahead. Drawing out a budget that works will allow you focus on cultivating good financial habits. This will help you in the future, as you recover from the bankruptcy and rebuild your financial life.
Stop Blaming Yourself
In March 2010, Forbes magazine reported the top five reasons for filing bankruptcy include overwhelming medical bills, job loss, divorce, being the victim of a disaster or crime, and irresponsible use of credit. Only one of these factors can be controlled with any degree of success. All you can do is use credit responsibly in the future and forge ahead. The rest of these factors cannot be predicted, avoided, or controlled with any regularity.
Inform Your Loved Ones
While there's no reason to tell everyone you know, your parents and closest friends do need to be informed. Some creditors use illegal collection practices and may start calling them, so it's best that they hear the news from you personally. You may also need emotional support, so keeping your bankruptcy a secret is not usually in your best interest.
Surviving bankruptcy can be difficult. Keeping these tips in mind will help you with both the practical side of the process and in planning for the future. Best of all, they can help you keep a positive, healthy attitude. By putting them into practice, your bankruptcy can be a streamlined process that will assist you in getting back on track.