I will not be able to buy a home for 10 years! Ficton
There is a common but false assertion that bankruptcy automatically disqualifies you from getting a mortgage for at least 10 years. This is untrue. In fact, you can be in the middle of a Chapter 13 proceeding and still receive an FHA home loan. In most cases typically, mortgage lenders are open to considering an approval for a home loan after 2 years. Some lenders that are more strict have a policy of waiting 3 years to begin considering financing. It's possible to get mortgage financing before 2 years from the discharge date, you just may end up needing a down payment or you may have to settle for a much higher interest rate.
I will never get a credit card again! Ficton
Not all credit cards are created equal. A key step in rebuilding your credit rating is to obtain a secured credit card. A secured card is one that essentially allows you to borrow from yourself. You deposit a set amount of money, $500 is common, and that becomes your credit limit. Charging a small amount to the card and paying it off each month will rebuild your credit score. As with all financial endeavors, be sure to read the fine print. Stay away from any cards that charge high fees, don't report to the credit bureaus (that's the whole point of this!) or ask you to call a 900 number.
I will never be able to finance a car! Ficton
Thanks to the abundance of car loan choices today, you no longer have to wonder whether or not you can get loans after you file your bankruptcy. A number of companies now offer flexible terms when it comes to car loans.
Make a Realistic Budget and Pay Your Bills On Time! Fact
Even if you've never created, or stuck to, a budget before, after a bankruptcy is the time to get serious about doing so. Your budget is a spending plan and helps you manage your cash flow to prevent acquiring new and unnecessary debt. When creating a budget, remember that the goal is to live below your means. No 'keeping up with the Joneses'. Also, it's vital to pay yourself first, so include a line for saving. Emergencies or unexpected events can derail even the best laid plans. Having an emergency fund for when the hot water heater goes or your car needs a new transmission is vital. Paying all of your current bills in a timely manner must be a priority. Setting up automatic bill payments can help with this, especially if you're trying to break the habit of putting off Peter to pay Paul. Adhering to your agreement for repayment of existing debt is the single most powerful thing you can do to restore your credit.
Can there be advantages of filing for bankruptcy? Fact
There are several advantages to filing for bankruptcy. By far the most important advantage is that debtors may obtain a fresh financial start. consumers who file for Chapter 7 may be discharged from (forgiven from paying) most unsecured debts. You may be able to exempt (that is, keep) many of your assets, although state laws vary widely in defining which assets you may keep. Another big advantage is that collection efforts must stop. As soon as your petition is filed, there is by law an automatic stay, which prohibits most collection activity. If a creditor continues to try to collect the debt, the creditor may be cited for contempt of court or ordered to pay damages. The stay applies even to the loan that you may have obtained to buy your car. If you continue to make payments, it is unlikely that your creditor will do anything. Federal law protects your right to file for bankruptcy. For example, you cannot be fired from your job solely because you filed for bankruptcy.