Most people consider bankruptcy as a choice of losers, but quickly change their mind when it directly affects them. Sometimes bankruptcy becomes the only viable financial option thanks to uncontrollable circumstances, like a divorce or a layoff. If you find yourself in this position, the following article will be of great assistance.
Try to make certain you are making the right choice prior to filing your petition. You have other options, including consumer credit counseling help. If you file for bankruptcy, a mark is permanently left on your credit. Therefore, before you do this, you should utilize all the other options that you have.
Don’t throw in the towel. If you file for bankruptcy, you might be able to reclaim certain property that has been repossessed, such as your car, electronics or jewelry. If the property you own has been repossessed under 90 days before the bankruptcy filing, you may still be able to get it back. Speak with your attorney about filing the correct petition to get your property back.
Weigh all of your options before declaring bankruptcy. For example, you may want to consider a credit counseling plan if you have small debts. You may have luck negotiating lower payments by dealing directly with creditors, but be sure to document any get and new agreement terms in writing from each creditor.
Chapter 13 Bankruptcy
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. In Chapter 7 most of your outstanding accounts will essentially be erased. You will no longer be liable for any money that you owe to your creditors. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. Both options have advantages and drawbacks, so do your research before deciding.
Do what you can to keep your home. Filing for bankruptcy does not mean you have to lose your home. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. Otherwise, try looking into house exemptions that may let you remain in the home if you meet certain financial threshold requirements.
Avoid filing for bankruptcy if you make more money than your monthly bills. Bankruptcy might seem like a good way to get out of paying your bills, but it will devastate your credit for the next ten years.
If you decide to file for bankruptcy, it’s important that you’re educated about your rights. Collectors may try to convince you that your debt can’t be discharged. There are very few debts, such as child support or student loan debt, that can’t be bankrupted. If the debt collector tries to tell you that your debts, which do not fall into those categories, cannot be bankrupted, take a note of it, look up the debt type, and report them to your state’s attorney general office.
Facing bankruptcy is not a fun situation and cause a lot of stress and anxiety. To relieve yourself of some stress and keep thing organized, hire a good lawyer. Don’t skimp when hiring a good lawyer. You do need someone who is costly, just someone who is good at what they do. Speak to those around you at work or social settings, who have dealt with this. Make the most of the BBB and consultations with attorneys to increase your knowledge and decision-making ability. You might be able to view a court hearing. You might be able to watch how your prospective attorney handles the case.
Be sure you know the bankruptcy laws before you think about filing. There are often laws prohibiting the transfer of money from the filer for a certain period preceding the bankruptcy filing. Not only that, but the filer cannot lawfully accrue additional debt just prior to filing.
There are a lot of things to consider prior to filing for bankruptcy. Perhaps credit counseling can resolve your issues. There are even non-profit companies that may be able to help you. They can work with the creditors to lower payments and interest. They collect payments from your and then pay the creditors.
Avoid large cash advances from credit cards when considering bankruptcy. You may think these debts will just be washed clean, but you are wrong. This fraudulent practice is a demonstration of bad faith. Debts you incur this way will likely not be discharged in a bankruptcy, and you will still have to repay them.
Before you file for personal bankruptcy, take great care in paying off your debts. There are many laws when it comes to bankruptcy, including prohibition of paying some creditors 90 days before you file, as well as family for a whole year. Do your research and figure out the laws for you.
You don’t necessarily have to forfeit all your assets when you file for bankruptcy. Personal property is exempt from bankruptcy claims. This includes some jewelry, clothing, household furnishing, electronics and more. Your current state’s laws, deciding between Chapter 7 or 13, and your current financial position will determine just how much you get to keep.
Credit Report
You should obtain a copy of your credit report from all three reporting agencies soon after you declare bankruptcy. Be sure to check your credit report for accuracy of closed accounts and discharged debts. If you notice any errors, address them immediately so you can start rebuilding your credit.
Look all paths you can take to get control of your financial debts before making the choice to file for bankruptcy. Because circumstance can create financial issues that result in bankruptcy, you can rest easy. Although the bankruptcy process can last several months, you will be less stressed out if you understand everything that is happening.
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