Although bankruptcy causes stress, it can help financially. On one hand, having people go through all of your personal financial information can be formidable. On the other, however, after the bankruptcy has been discharged, you can get a fresh start and begin to re-build your credit. You can make bankruptcy easier with the following tips.
One of the most important things to remember when filing for bankruptcy is to be honest and truthful every step of the way. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. You can determine exactly which of your possessions are at risk by consulting this list before you file. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
Protect your home. You don’t have to lose your home just because you are filing for bankruptcy. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. Check to see if you pass the requirements necessary to file for a homestead exemption.
Credit Score
If you are making more money than you owe, bankruptcy should not even be an option. You should know that filing for bankruptcy will ruin your credit score for at least ten years and that improving your credit score will be expensive.
If you have fears that you will lose your car, ask your lawyer about the possibility of lowering your car payments. Filing for Chapter 7 can help to lower your monthly payments on possessions such as your vehicle, helping to ease your financial load. The requirements are that your car purchase has to be greater than 910 days before filing, must have a loan that is high in interest, and must have a solid work history.
Prior to filing for bankruptcy, purge from your vocabulary the word “shame”. Many people feel guilty, embarrassed and unworthy when dealing with bankruptcy. These are useless emotions, however, and can be harmful to your mental state. Keeping an optimistic view as you deal with your financial woes is the most productive way of dealing with a bankruptcy.
Before filing for bankruptcy, you must be educated on the specifics of all bankruptcy laws. Did you know that in some areas, you cannot transfer assets from yourself to another person in the year previous to filing occurring? Not only that, but the filer cannot lawfully accrue additional debt just prior to filing.
Consider your options before deciding to file personal bankruptcy. You might want to look into the possibility of credit counseling instead. There are many non-profit debt counseling services available. Their job is to lower your payments and interest through negotiations with your creditors. Often, they make the payments to your creditors, and you make your payment to them.
Avoid large cash advances from credit cards when considering bankruptcy. You may think these debts will just be washed clean, but you are wrong. Not only is this fraud, but you could end up having to pay back the money, even once you have filed for bankruptcy.
Don’t take too long when trying to decide whether you want to file bankruptcy. Although it may be very difficult to admit that bankruptcy is the answer for you, it will be much harder to continue spiraling into a debt quagmire. Take responsibility to talk with a bankruptcy expert sooner, rather than later. The longer you wait, the more difficult the situation can become.
Realize that bankruptcy, ultimately, might be better for your credit than continuing to make late payments or miss payments on your debt. Your credit report will show your bankruptcy for the next ten years, but it will also allow you to start working towards repairing your credit immediately. This is why people call bankruptcy a fresh start.
Before you file make sure that you are not doing anything to bring yourself in debt any more. Don’t go on a spending spree or increase your debt right before you file. Your creditors will take your current finances into account when assessing your bankruptcy filing. Try demonstrating that your current behavior and financial habits have positively changed.
There are pros and cons to filing bankruptcy. Just know that what you learn today is going to help you out a lot in learning about bankruptcy. The advice in this article will help you to deal with bankruptcy successfully. Use these tips smartly to make the best decision possible.
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