Q: CAN I LOSE MY JOB IF I FILE BANKRUPTCY?
A: It is not normal to lose your job due to filing bankruptcy. Most employers will probably not even be aware of the filing. There are some jobs that require a certain security clearance. While most of these jobs will not terminate your employment, there are some security clearance level positions that could terminate you for filing a Little Rock bankruptcy. If you are employed at a company or in government and need certain security clearances, it is best to investigate whether a bankruptcy will affect your employment. Outside of those situations and certain financial positions, your job should not be in jeopardy due to filing bankruptcy in Little Rock.
Q: IS THE CREDIT COUNSELING AND DEBTOR EDUCATION CLASSES REQUIREMENT DIFFICULT?
A: The requirement of credit counseling and debtor education classes is not difficult. Every debtor who files bankruptcy will be required to take two classes. The first class, to be taken prior to filing, is called Credit Counseling. It focuses on your personal debt situation and gives you tips on how to balance your budget going forward. It is normally an hour and can be taken online. The second class, which can also be taken online, is called Debtor Education and it is a little more in depth. The class normally lasts two hours and attempts to educate the debtor on debt management and how to avoid filing bankruptcy in the future. These classes are meant to assist debtors with managing their finances going forward. The tests will not be looked at by attorneys or the court. At the end of each course, the debtor is given a certificate, which they will file with the court to show that they have taken the required classes.
Q: WHAT STEPS CAN I TAKE TO REPAIR MY CREDIT AFTER BANKRUPTCY?
A: The best step a debtor can take post-bankruptcy is to manage their finances better going forward. One of the most important aspects of a debtor’s fresh start is repairing their credit rating. This can be done by doing certain things. Every situation is different and some situations make it easier for a credit rating to be repaired.
If you own a home or vehicle, or both in some situations, you might be able to reaffirm the debt in your bankruptcy. Reaffirming a debt means you intend to continue paying on the debt and will treat the debt as if it was never involved in a bankruptcy. A debtor can reaffirm a debt by signing a reaffirmation agreement with the creditor and having it filed with the bankruptcy court. The agreement serves as proof and permission that the creditor is still able to collect from the debtor regarding the debt. In return, the debtor is able to keep the car or home and continue making monthly payments which will build up their credit over time.
Outside of debts that are reaffirmed, most of the improvements in your credit rating will come in small steps. Debtors who have just been discharged from a bankruptcy will be offered numerous credit card agreements as soon as they are done filing bankruptcy in Little Rock. It will be up to them to determine if a credit card is more of a temptation and risk than it is a reasonable decision to build up your credit score. If the card is used correctly and responsibly, it will help build up your credit over time. However, if it is used when you don’t have the money to pay for something, there is a good chance you will be filing bankruptcy again when you are eligible to do so.
Many clients are advised to get secured credit cards that they have to put money in the account to use, which takes the risk of mismanagement out of the equation. A secured credit card is the safest way for debtors to build their credit and stay out of trouble with creditors, but it also will require patience.
In the end, your income and debt will always be as important as everything else when determining credit. Creditors will want to know that you make enough money to afford the items you need credit for and they will also want to see that you don’t have a lot of outstanding debt. It is just as important to properly manage your career as it is to manage your credit score if you truly want to have good credit.