Dealing with Credit Card Bankuptcy
Many people today face the unfortunately reality of having to file for bankruptcy. Because of the struggling economy and loss of jobs, people are forced to put purchases on credit cards. Therefore, consumers have mountains of credit card bills, and they find themselves in a situation where they cannot pay them, so they file for bankruptcy.
Credit Card Bankruptcy
Bankruptcy should be a last resort for consumers. However, sometimes people just cannot get out of debt, and they need some relief. They want to put a stop to the harassment from creditors. People can file for Chapter 7 and Chapter 13 bankruptcy, and then they will get rid of their credit card obligations.
How to File for Credit Card Bankruptcy
Bankruptcy is unlike debt settlement plans in that consumers are not required to make any more payments on their credit cards. People who have lost their job and do not have income can file for bankruptcy and be free from their credit card bills. In order to file for bankruptcy, individuals should seek the advice of an attorney, who can file the petition in court.
Who can File for Bankruptcy
In order to file for bankruptcy, an individual’s average income over a 6 month period must be below average. When filing for credit card bankruptcy, a person must sometimes turn over some assets, such as a second home, jewelry, or other valuables.
Advantages and Disadvantages of Credit Card Bankruptcy
The main advantage of credit card bankruptcy is that it will free a person from their credit card debts. However, it can really harm a person’s credit. It could show up on a credit report for ten years. This can really harm an individual’s chances of getting a job, and it could also hurt their chances of getting loans or credit cards in the future.
Recovering after Credit Card Bankruptcy
After filing for bankruptcy, it is sometimes very difficult for consumers to rebuild their lives and recover. However, it can be done. With patience, determination, and diligence a person can recover from bankruptcy. There are several things that a consumer can do to recover from credit card bankruptcy:
• Build up an emergency fund: Creditors today are very cautious about giving out loans. In fact, some lenders will not even consider giving a loan to a person if they have bankruptcy on their credit report. Therefore, it is wise for a person to start saving some money each month so that they can use it when needed.
• Only buy what is necessary: It is always simple to just put things on credit cards. After declaring bankruptcy, consumers should not spend what they do not have.
• Form a plan: After bankruptcy, people need to make a budget and stick to it
• Get a Second Job: Until a person gets back on their feet again, they might need extra income. Individuals can get a part time job until they can pay their bills again. This will not be done overnight.
• Pay bills on time: Consumers cannot get their credit score raised if they are still delinquent on bills. It is a good idea for individuals to monitor their credit.
• Get a secured credit card: The limits are low, but having a credit card is one way to really help your credit score.
Recovering from credit card bankruptcy is not easy and will take time, but it can be done. A person cannot undo the mistakes that they have made, but they can learn from those mistakes and look toward building a better future for themselves and their family.