Filing for bankruptcy has become commonplace in the United States in the last several years. While it is not something anyone is eager to do, it does not carry the stigma it once did. Although this is often the best option to wipe the slate clean and move forward, your credit rating will take a nosedive.

Even though it may not have been the greatest before bankruptcy, this new addition can hinder your ability to get an auto loan, credit cards or mortgage for up to ten years. Working with a local bankruptcy lawyer can help you understand the ramifications and decide if this is the right choice for you. Once Chapter 7 or 13 has been filed and discharged, there are several steps you can take to begin rebuilding your credit.

Take a Breath and Regroup

Now that some of the weight of those finances has been lifted from your shoulders, the emotional impact of the discharge may hit. Throughout the process, most people don’t realize the how their life can change. There may be some disappointment and shame mixed in with the reality of rebuilding credit from the ground up. Take some time to reflect on what choices contributed to the situation and learn from them. Surround yourself with people who support you and can help you deal and healthily cope with the upcoming challenges.

Embrace a No-Frills Lifestyle

Depending on the type of discharge, the court may dictate that certain assets be sold to satisfy creditors. There may also be existing debts that have a specific payoff period, typically three to five years, designated by the court. As a result, frugality may be necessary. Downsized living quarters and tighter grocery and other spending budgets may be required. The Law Offices of Brent George can help you create a plan that meets the discharge requirements yet still allows you to move forward financially.

Rebuild Your Credit

Although it may be difficult in the beginning to rebuild your credit, it’s not impossible. Start with a secured credit card. Take some time to find one that has good rates and doesn’t report to the credit bureaus that it’s secured. Pay the bills that you have on time to show that you can be financially responsible. If you need to get a car or take out a loan, shop for lenders. You may be surprised at the options available.

Bankruptcy was designed to provide individuals and organizations a way to discharge some of their debts and start again fresh. With offices in both Oxnard and Thousand Oaks, The Law Offices of Brent George is an accessible resource that can walk you through the best options for your personal situation to get out of the clutches of debt and begin rebuilding your life.

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The financial crisis between 2007 and 2008 saw many businesses file for bankruptcy. However, hundreds of companies file every year for a litany of reasons. As a precaution, it is worth it for any entrepreneur to speak to a bankruptcy lawyer well before the risk of filing is on the horizon, just to become familiar with the risks and also how to avoid going bankrupt. Consider it as part of an investment for the ‘health’ of your business.

Lack of Viability

A lack of viability is a sure way to struggle with your business. Part of ensuring viability involves making sure people want your product or service over a long period of time. Many businesses fail because they are entering an oversaturated market and there is too much competition. Every business needs to find a niche or a unique take on their product or service. If you open a small clothing store, then you need to offer consumers something they will not get by going to Target or Wal-Mart. Additionally, some businesses are based around an idea that is simply poorly thought out. Before starting any business, you should ask yourself what problem your company solves, and how is it different or better than the next guy.

Lack of Liquidity

In the event your company requires an influx of cash, the easiest thing you can do is sell off an asset. A bankruptcy lawyer can look at the assets you have acquired over the years and determine what would be best to turn into cash. This can include equipment, property, or even labor. A company may even need to sell excess inventory to pay employees’ paychecks.

Poor Leadership

When you run a business, you want to bring on other people to help you make important decisions. Candidates and employees should be carefully vetted so that you know you are only bringing on the best. You want to hire people who know how to make hard decisions, know how to prioritize, and are able to inspire employees.

No Solvency

Solvency is similar to liquidity, but it is more closely related to the debts a company needs to repay. Every business will require a loan at one point or another, but it needs to pay off this loan in a timely fashion with interest. You should be able to make loan payments on time while still being able to keep the business operational. Identify your “current ratio.” This is the rate of current assets, such as inventory, supplies and receivables, compared to current liabilities, which include monthly payments, payroll taxes and debts. Ideally, you want a current ratio of 2:1.

There are a number of ways businesses can lose revenue to an extreme degree. If your business seems to be inching toward this downward trend, then it would be wise to consult a bankruptcy lawyer to review your options.

The Law Offices of Brent D. George are here to help. Feel free to contact us – our first consultation is free.

Filing bankruptcy can give you the opportunity for a fresh financial start. Working with a knowledgeable bankruptcy lawyer such as Brent George can relieve pressure from creditors and stop garnishments or other collection activity. Once the bankruptcy is discharged, it’s time to rebuild credit and focus on the future.

Budget Spending and Saving

First, understand your spending habits. After tracking income and expenses for a couple of months, develop a budget that you can adhere to. Make saving part of each month’s budget so you’re ready for unexpected expenses or great opportunities. As your circumstances change over time, update your budget to reflect these changes.

Monitor Your Credit

Even though your credit score may have gone down due to past delinquencies, it’s never too soon to start rebuilding. Make sure your credit report accurately represents your credit activity. You may want to discuss options for correcting errors with your bankruptcy lawyer.

Make Timely Payments

By making timely payments, your credit score can start to improve. It’s also important to avoid bouncing checks, incurring overdraft fees, or taking out payday loans. When these credit options are on your credit report, they may give your creditors the impression that you’re experiencing cash flow issues.

Rebuild Credit with Credit

While you may use cash or debit for the majority of purchases, you may also look for opportunities to purchase on credit when possible. It can be helpful to set up a credit card account and use it only when you plan to fully repay the balance each month. In addition to helping rebuild credit, you may also earn awards such as cash back, airline miles or discounts.

Once you have a couple of credit accounts established, you may not want to add or move accounts for at least a couple of years. Although you may qualify for a lower rate or introductory offer, opening and closing accounts, or adding too many accounts, may lower your credit score in the long run.

Postpone Making Major Purchases

You may be able to find lenders to finance automobiles or other major purchases immediately after bankruptcy. If possible, postpone these types of purchases for at least a couple of years. You may qualify for better rates and terms once you can show positive payment history.

Share Your Story

Bankruptcies occur for many reasons. Sharing your story with potential creditors, including the steps you’re taking to rebuild your credit, may positively influence their credit decisions. Consult with your bankruptcy lawyer on how to present your circumstances in the best light as you move forward with rebuilding your credit and bouncing back from bankruptcy.

When considering options for debt relief, it is important to be aware of the impact your choices may have upon your credit score. There are various factors that influence a credit score rating, and while filing for bankruptcy will undoubtedly lower your credit score, having your debts go to collection agencies will also have a negative impact. It is not unusual for a credit score to go up as much as 100 points within 12 months after filing a Chapter 7 bankruptcy. In some instances a debtor’s credit score has increased as such as 150 points within the 12 month post-filing-period. If you find it difficult to understand all your debt relief options, Brent George Law in Ventura County is here to help.

Chapter 7 vs Chapter 13

The two types of bankruptcy used for personal debts are Chapter 7 and Chapter 13. How many points they knock off your credit score is partly based on how good your score is prior to filing. Higher scores tend to fall farther than lower scores, although other factors such as the amount and type of debt also play a role. The drop in the credit score can range from 150 to 260 points. The main difference between Chapter 7 and Chapter 13 is how long they stay on your credit report. Chapter 13 may be on your report for seven years and Chapter 7 lasts as long as 10 years.

Credit Recovery

There are some steps What can you do after a bankruptcy to improve your credit score? The first step is to monitor your credit report on a regular basis. Check it for inaccuracies and make sure that as your debts are discharged they are no longer listed as delinquent on your credit report. You should apply for credit that has less stringent requirements, such as car loans and department store cards. Also keep your older lines of credit active, if possible. That credit card you’ve had for 20 years gives you extra points on your credit score for the length of its credit history. With careful and judicious use of credit, after a few years you can emerge from your Chapter 7 or Chapter 13 filing with better financial health.

Professional Help

Be sure to seek professional help when dealing with debt. Brent George Law can assist you in wading through all your options. They have the experience and qualifications to advise you with your finances. It is difficult to live without good credit. Everything from renting a home, getting a job, and buying furniture on the installment plan can be affected by your credit rating. No one plans for a bankruptcy, but it may give you the clean slate you need to start over. With Brent George Law of Ventura County on your side you can get the competent help you need to make an informed decision.

Filing for bankruptcy is a difficult decision. If it’s one you’re facing, you are likely wondering if you can afford to hire a bankruptcy attorney. To make the right decision, you need to understand how they can help. You also need to know what you’ll be facing if you proceed on your own. Only then can you make the best choice for your situation.

Knowing Which Chapter to File

Many problems that occur during a bankruptcy come from prebankruptcy decisions. Deciding which chapter to file is one of those, as different chapters protect different things. Many people who represent themselves file under the wrong chapter for their situation simply because the law is so complex. In fact, some people don’t need to file for bankruptcy at all! Having an experienced, reputable firm like Brent George Law behind you will prevent that.

Filing Documents

There is a plethora of documents that must be filed to start the bankruptcy process. There are even more during the process as well as after the hearing. Incorrect or missing documents can disrupt the entire case. Using the wrong property exemption forms can cause you to lose assets you hoped to protect. A well-versed attorney will save you time, frustration and potentially costly mistakes.

Meeting Requirements

There are specific requirements that must be met prior to filing that many people misunderstand or miss. A vivid example of this is the requirement of credit counseling in Chapter 7 and Chapter 13 cases. The counseling has to come from an approved provider and usually requires a certificate of completion to be filed before the bankruptcy itself. People representing themselves often don’t realize this and either miss it completely or receive the counseling from a firm that isn’t an approved provider. A bankruptcy attorney knows the requirements you’ll need to meet, as well as when and how you have to meet them.

Preparing for the Unexpected

During the hearing itself, creditors can file motions for a variety of reasons. If you’re representing yourself, you may not know how to respond or defend yourself. This can also result in the need to file additional documents that you don’t understand or are unable to complete inaccurately. This is where a bankruptcy attorney is of the most value, as their expertise will let them respond immediately.

Making Your Decision

Understanding the complex requirements of filing for bankruptcy is only part of what you need to know. Understanding how just one incorrect form can lead to your case being dismissed or property being lost is just as critical, if not more so. Hiring a bankruptcy attorney will protect you from unnecessary loss, save you time and be the expert you need in this already difficult time. Call the Law Offices of Brent George for a free consultation on your case.

You’ve filed for bankruptcy but you have questions about what happens now and what else you need to do before the bankruptcy court discharges your debts. That’s understandable. If you’re represented by a bankruptcy attorney, he or she can answer those questions, but if you’re representing yourself, who do you turn to for answers?

You may not know that you can hire an attorney at any time during your bankruptcy, but you can. However, if you’re thinking of doing so, talk to one as soon as possible so he or she not only can answer your questions, but also review the papers you’ve already filed.

These are the “steps” in a bankruptcy proceeding:

Automatic Stay

When you file for bankruptcy you are assigned a case number and an immediate stay goes into effect. That means your creditors can’t harass you once they’re aware you’ve filed. If you’re represented by a bankruptcy attorney, he or she will send letters to all your creditors and none of them will contact you. If you’re representing yourself, memorize your case number and give it to any creditor who calls or sends you a letter.

Creditors’ Meeting

If you’re represented by a bankruptcy attorney, you’ve already given him or her your tax returns and other documents. If you’re representing yourself, your bankruptcy trustee will ask you for them. The trustee will schedule a creditors’ meeting, usually within 4-5 weeks. You must attend this meeting. The trustee will ask you questions about your paperwork and you must answer truthfully. Your creditors also can attend this meeting and ask you questions, but usually they don’t attend.

Dealing With Your Debts

What happens to your debts during bankruptcy depends on which type of bankruptcy you filed. If you filed a Chapter 7, you won’t have to pay anything to anyone unless some of your debts are exempt. If you filed a Chapter 13, you’ll need to construct a repayment plan, submit it to the court, and begin making payments within 30 days thereafter.

Debtor Education Program

You’ll need to attend a debtor education program that will teach you how to manage credit, create a budget, and make future financial plans. You’ll need to file your completion certificate with the court.

Discharge

If you filed a Chapter 7, the bankruptcy court will discharge your non-exempt debts shortly after you complete the education program, sometimes in as few as 60 days. If you filed a Chapter 13, final discharge doesn’t occur until you’ve made the last payment of your repayment plan. This usually takes 3-5 years.

An experienced bankruptcy attorney like Brent George will guide you through all these steps and make it easier for you to comply. Call Brent George Law for a free consultation.