After a bankruptcy case, debtors hope to carry on with their life as soon as possible, especially as to financial matters. However, this typically requires a reasonable amount of patience, which some former debtors lack. The following are some things that debtors can do to facilitate moving on after they have filed a bankruptcy case and receive a discharge.
First, debtors should keep certain documents easily available for reference.
The following are the most important documents from their bankruptcy case that former bankruptcy debtors may need:
- The bankruptcy petition;
- Notice of commencement of Chapter 7 bankruptcy case (notice of filing); and
- The Chapter 7 discharge order.
Some mortgage lenders request to see these documents when evaluating former bankruptcy debtors for credit. They are also important if some party claims a former debtor owes a debt that was previously discharged in the bankruptcy case. Consumers who are former bankruptcy debtors are entitled to receive one free credit report annually which may help them track any important changes to their credit that result from their bankruptcy case.
One of, the most necessary and crucial actions to take after receiving a discharge in a bankruptcy case, is for former debtors to review a credit report and ensure that all of the discharged debts from the bankruptcy case have been reported to the credit bureaus with a “zero” balance, rather than an outstanding balance, indicating the existence of a debt. This may interfere with obtaining new credit, so former debtors must review each debt. Former bankruptcy debtors may also want to ensure that no debt discharged in their bankruptcy case has been transferred to a new company or collection agent.
It is recommended that former bankruptcy debtors make a budget to ensure that they don’t live beyond their means, and, again, find themselves in the situation that requires the filing of yet another bankruptcy case. Any budget must be strictly followed and should not rely on using credit to purchase otherwise unaffordable items. It is wise to avoid new credit cards with exorbitant interest rates and instead plan for the future by establishing reasonable and realistic financial goals.
A budget must include some allocation for emergencies like dental work or car repair. Even if this monthly amount seems insignificant, it may be useful in the future to use for long-term financial goals such as college tuition or retirement. It may also help avoid new debt for any unforeseen expenses
Immediately after receiving a discharge in a bankruptcy case, former debtors are advised to open an account for a secured credit card. This is an excellent way to obtain new credit soon after receiving a bankruptcy discharge. Former debtors may begin with smaller credit limits to help ensure they make the minimum monthly payment.
Individuals considering bankruptcy as a debt relief solution often assume that bankruptcy will not provide the necessary help in a timely enough fashion to be truly effective and worthwhile. This couldn’t be farther from the truth and is a myth of bankruptcy. It is important to consult with an experienced Utah bankruptcy attorney like one of the many qualified attorneys at the Morrison Law Group who can explain the process and timeline of both Chapter 7 and Chapter 13 bankruptcy cases. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.