Tennessee residents dealing with insurmountable debt might consider filing for bankruptcy. Doing so is a strong option for alleviating that burden. However, if you’re considering it, there are things to do before, during and after you file.
Before filing
Before filing for bankruptcy, review your financial documents to know where you stand. Have you considered other options for lowering your debt? If not, you might want to reach out to your creditors first to see if they would be willing to work with you on a plan to pay back your debt. Surprisingly, many are open to it because they want to be paid. Creditors might forgive late fees and interest if they can be paid at least a portion of what you owe.
During bankruptcy filing
During bankruptcy, there are important steps required. You must complete a credit counseling course, after which you will receive a bankruptcy certificate needed for filing with the court. If you are leaning toward Chapter 7 bankruptcy, you must pass the means test. You can only qualify if your income is under the median in the state. If your income is too high, you can file for Chapter 13, which gives you more time – three to five years – to pay back your debts.
Be honest about your finances and never hide assets. If you qualify for Chapter 7 bankruptcy, you might be able to keep your exempt property, but a trustee will assess everything to see what can be liquidated to pay back creditors.
After filing bankruptcy
After bankruptcy, stay up-to-date on all payments and maintain your job. You are allowed to apply for a new credit card but should be careful and responsible while using it. The best option is to apply for a secured card while you rebuild your credit. If necessary, get someone to cosign for you.