By the time you realize that bankruptcy is the best option for you, it's probably safe to say that you've been dealing with creditors for a long time.
Even worse than creditors are the collection companies, who are trained to bully you into agreeing to make payments even when you don't have a cent to spare.Â
Eventually you begin to feel that these companies have all the power and you have none. What's more, part of the reason bankruptcy carries a stigma is that creditors make you feel that without them, you won't be able to do anything. With a bankruptcy on your credit history, aren't you effectively ruined for years? The answer is an emphatic "no". Rebuilding your credit after bankruptcy is not impossible.
The truth is that filing bankruptcy is actually the first step in rebuilding credit. By filing bankruptcy, you get rid of the burden of debts you cannot pay. That frees up your income, and freeing up income gives you the money to start rebuilding your credit.
Think of bankruptcy as a beginning of the process, not an end.
After you declare bankruptcy, you can put your mistakes behind you and start fresh. Mistakes are human; that's how we learn. Don't beat yourself up about having made some. We all make mistakes, lots of them.
Arguably, your time would be better spent working to correct the habits and behaviors that caused your life to spin out of control in the first place. With a few pointers and a sound plan in place, you will hit the ground running.
Then, with your income freed up, you will be on your way, taking the steps needed to rebuild your credit as fast as possible.
One basic, initial step you can take after declaring bankruptcy is getting a copy of your credit report. You should wait some time--three months or so-- after declaring to order the report. This will ensure that the information on your report is up to date. Getting the report will help you assess your creditworthiness, since that is what creditors will look at first. You should also take the opportunity to correct any mistakes you find on it.
Once you've done what you can to make your credit report as positive and accurate as possible, continue to take affirmative steps toward a brighter financial future. You declared bankruptcy--this was brave and decisive. You can handle what comes next with a good plan in place.
As you prepare your plan, identify what got you into trouble and your role in the situation. Look back over your past and be totally honest with yourself. Figure out where you can improve. For instance, you can need to control your spending, start a savings account, make financial decisions that will benefit you over the long term, seek financial advice from people in the know, and keep positive.
Once you've discharged unmanageable debt you can start fresh, but with the added benefit of the experience and the knowledge you have gained. You will be in control...but this time...you will know what to do...and more importantly...what not to do.