Bankruptcy is something that no one wants to think about or discuss. It is one of those hidden things that are kept from friends and family. However, in painful times and your debts are way out of control, this may be something actually to consider. After seven to ten years, you can start all over as the bankruptcy was long in the past. Most of the times you can choose which debts you need help with. If your house is paid in full or you are still making payments, how will this affect your bankruptcy? Additionally, will you still be able to maintain or buy extra home insurance?
1. Before you file for bankruptcy, obtain home insurance. Once you file and are granted the bankruptcy, your credit history is shot. Home insurance companies run a credit report right away when you apply. Some will not go further with you if you have poor credit. Others will want a large down payment as well as a higher premium each month. If you obtain the insurance before the bankruptcy, the company probably will not raise your rates. Especially, if you have a good standing with your insurance company.
2. Improving your credit score. As stated previously, depending on the bankruptcy you file, the judgment will stay for between seven to ten years. During that time you can start refining your credit score. Several ways to accomplish this such as buy an used car, receive a low balance credit card or purchase an item from a rent-a-store. Always pay more than the minimum payment. Also, pay on time. While you are waiting for the bankruptcy to fall off, you can begin receiving a better score, which will help you receive lower premium payments on your home insurance.
3. Wait for at least two years. Your home insurance premiums could be lowered two years after your bankruptcy claim. Keep all your records during those years. Be sure to make all payments on time and file your receipts in a safe place. Once that time elapses, speak to the home insurance company to reevaluate your coverage and premium.
4. Shop, shop around. Some home insurance companies will work with bad credit, low income and bankruptcy clients. Never settle for the first quote. Show records, receipts and even the items that were included in the bankruptcy. Your premium from one company to the other could be as different as night and day. It is important not to give into one company without exploring all your options.
Bankruptcies are a difficult time in your life. You do not need the added stress worrying about the things that matter most, your family. Be protected with home insurance for your piece of mind. A bankruptcy does not have to stop you from getting the things you need. Be diligent, straightforward and look for the correct solution. With these steps, you can keep your costs down when unfortunate circumstances happen.
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