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What You Need to Know About Bankruptcy

While a bankruptcy is removed from your credit report once seven to ten years have passed. It can even be removed earlier if you hire a legitimate credit restoration company to assist you in having your bankruptcy removed. You may think that once the bankruptcy is removed, the filer is given a clean slate and a new start. But with questions such as "Have you ever filed for bankruptcy" asked on loan applications, it's clear that you can never be completely done with a bankruptcy. There are alternatives you ought to consider before filing for bankruptcy.

It's clear that you can never be completely done with a bankruptcy



Contact your creditors and ask for their cooperation. They may be able help you set up alternative payment arrangements. If you are buried in credit card debt, explain your situation, and ask the lender to temporarily reduce your minimum monthly payment. They may also waive late charges or extend the payment due date.

Consumer Credit Counseling Service, or CCCS, is a nonprofit debt counseling service that assists consumers who are over their heads in debt. CCCS is funded and controlled by the credit grantors and credit bureaus. Often, the services provided by CCCS can benefit the consumer. However, if you decide to leave CCCS before you have finished their program, they can note your failure to complete the process as a questionable listing on your credit report. Also, when you participate in the CCCS program, your creditors will sometimes (though rarely) note it on your credit report. Participation in a debt counseling program is considered a huge red flag by prospective credit grantors. Remember, paying off your debt is a step in the right direction, but it does not restore your credit.

Consider selling any assets you may have that have a resale value and applying the proceeds to your debt. Creditors are sometimes willing to negotiate balances due.

It may be helpful to consolidate your outstanding debts into a single loan. This can be done through credit card balance transfers and home equity loans. Combining your debts can be especially helpful if you have a hard time remembering and keeping track of your debt. If you have friends or relatives that are in a position to help you, don't be afraid to ask for their assistance in the form of a loan. Be sure to keep everything having to do with the loan as businesslike as possible. When you ask for the loan, you need to commit yourself to the obligation of paying it back in a timely manner.

Different states, Different laws

Do your homework and research the laws governing bankruptcy in your state. These laws can vary by state, so it's important to make this effort. This is best done by either hiring an attorney who specializes in bankruptcy or looking up your state's bankruptcy laws up at your local library or on the Internet.

Order your credit reports

Your credit reports will give you a clear picture of where you are financially and will aid you in deciding whether or not to file. They can also alert you to any incorrect information on your credit history. You can also prevent serious damage done through identity theft by checking your credit reports regularly.

Bankruptcy fraud

It's also important to check your credit reports in case you're made a victim of bankruptcy fraud. According to the Federal Trade Commission (FTC) nearly 25 million adults, 11.2 percent of the adult population, have been made victims of identity theft, also known as identity fraud. Bankruptcy fraud is a specific type of identity fraud in which the criminal steals a person's credit cards, maxes them out and then files a bankruptcy in the victim's name. If you believe someone has filed for bankruptcy in your name, write to the U.S. Trustee in the region where the bankruptcy was filed. A list of the U.S. Trustee Programs' Regional Offices can be found in the Blue Pages of your phone book under U.S. Government Bankruptcy Administration. In your letter, you need to describe the situation and provide proof of your identity. The U.S. Trustee will make a criminal referral to law enforcement authorities if you provide appropriate documentation to substantiate your claim. You also may want to file a complaint with the U.S. Attorney and/or the FBI in the city where the bankruptcy was filed. The U.S. Trustee does not provide legal representation, legal advice or referrals to lawyers. That means you may need to hire an attorney to help convince the bankruptcy court that the filing is fraudulent. While the U.S. Trustee does not provide consumers with copies of court documents, you can obtain them from the bankruptcy clerk's office for a fee.

It's important to gain all the information you can before taking a step as serious as filing for bankruptcy. Be sure to consider all of your options so that you can make the best decision for you and your family. For a free bankruptcy consultation go to www.totalbankruptcy.com. Checking your credit reports can help you determine exactly where you stand financially and can also help prevent and limit damage done to your credit history.

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