Bankruptcy is one financial situation nobody wishes to experience. Losing your job or your business is bad enough, but admitting that you are no longer able to pay your creditors is the worst thing that can happen to you financially. It signifies that you have lost everything – your source of income and even your self esteem.
The problem can be compounded by worrying about the possible scenarios that can happen after you filed a bankruptcy protection in court. It affects your everyday life. If you still have a job, you worry that creditors will go for your pay check. If you have some assets which can be sold, you worry that your creditors will go for it too.
Here are some solid advices to help you weather the worse of a bankruptcy filing:
- Sit tight, everything will pass
Creditors usually will try to recoup their money by going after anything you have that has monetary value. So if you have no money and no job, the best thing to do is to wait until the debt is removed from your credit history. Your creditors will hesitate to initiate court action knowing that you have no money or assets that they can take.
- Be wise with your money
Well, the fact that you got bankrupted means that you might be having some problem with handling money. If there is a good time to change your habit, it is now. If you plan to pay your debts over a period of time, you must take some drastic changes on the way you manage money matters.
Too much debt is usually the result of spending more than you earn over a long period. You got two choices here – either you reduce your expenses or add to your income. The moment you realize that you have a problem managing your finances, it will be easier for you to solve your problems.
- Talk it out with your creditors
Faced with the choices of losing all their money or recovering some of it, creditors are more than willing to negotiate. Bankruptcy is hard to both the creditors and the bankrupt person. If you can prove that you still have the capacity to pay your debts if given some considerations like lower interest rate or a longer time frame, a deal could be worked out. This works best for both parties. You can then slowly build your finances back to a healthy level.
Heading these advices does not give one a one hundred percent guarantee that his position will become immediately better. So many things need to be worked out before your financial situation will be back to normal after a bankruptcy. It takes time. You will not wake up a day after you see all your money gone and find them back again.
Just like the way you built your initial financial position, recovering from bankruptcy takes diligence and perseverance. What you have lost can surely be restored.