Many people find themselves feeling unworthy, depressed or frightened when going through bankruptcy. They are very worried about paying bills and living day-to-day. However, bankruptcy isn’t a process that will forever hurt your future.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. Retirement accounts should never be touched if it can be helped. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.
Do some research to find out which assets you could lose by filing for personal bankruptcy. The Bankruptcy Code lists the kinds of assets which are exempted when it comes to the bankruptcy process. It is important that you read this list before filing for bankruptcy, so that can find out whether or not your most prized possessions will be seized. If you fail to go over this list, you may be unpleasantly surprised sometime down the road if any of your most valued items are seized.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. Those with smaller debts may find use in a program for consumer credit counseling. Some creditors will work with you to help you pay off your debt with lower interest rates, lower late fees, or an extended loan period.
Many bankruptcy lawyers offer free consultations, so go to several before choosing one. Ensure that you have a meeting with a real lawyer instead of an assistant, since they can provide the best advice. By shopping lawyers, you will be more likely to find one that makes you comfortable about the process.
Don’t file for bankruptcy if it is not completely necessary. It may be that all you really need to do is consolidate some of your debts. Filling for bankruptcy is a lengthy, stressful process. Remember that your credit will be affected by the mark of personal bankruptcy for a long time. This is why you must ensure that bankruptcy is the only option left for you.
Chapter 13.
If you are going to be filing for bankruptcy, think about filing Chapter 13. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. This repayment period usually lasts from three to five years. If you make your payments faithfully during that time, any remaining unsecured debt will be eliminated. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
Do not forget to be around those you love. The process for bankruptcy can be hard. It is long, hard and sometimes leaves people feeling guilty or ashamed. A lot of people become depressed and withdrawn until their bankruptcy is discharged. However, this isolation will just make you feel worse, and it could cause you to be depressed. Therefore, it is important that you continue to spend quality time with your loved ones despite, in spite of your current financial situation.
Filing for bankruptcy should not be done on a whim. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. If you are looking at foreclosure, think about a loan modification program. This type of plan allows your lender to work with you eliminating charges, extending your loan, and lowering interest rates to help you pay back the loan without drowning in debt. At the end of the day, creditors want to get paid, and sometimes a debt repayment plan is preferable to dealing with a bankrupt debtor.
Now you can probably see that filing for personal bankruptcy protection does not mean your finances are doomed forever. Bankruptcy is a serious matter, but it can be managed. Making use of the tips you found here will allow you to heal your financial situation.
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