It may not be an easy decision to come to; however, bankruptcies are often necessary. It’s best to make the decision of filing for personal bankruptcy after doing a little research and gaining a clear understanding of the topic. Read on for knowledge and wisdom passed on from those who have gone through bankruptcy themselves.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Don’t touch retirement accounts unless you don’t have a choice. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
It is essential that you are honest and forthright in the documentation you provide for your bankruptcy filings. You might feel tempted to not declare certain assets in your bankruptcy in order to protect them from forfeiture, but if you’re found out, the process could take longer, or worse, you might be banned from filing for bankruptcy completely.
It is important to remind your lawyer of any details that may be important to your case. Don’t assume that they will recall every detail that you go over with them without a friendly reminder. All information submitted to the court with your signature needs to be double checked.
Protect your house. Bankruptcy filings do not necessarily mean that you have to lose your house. You might be able to keep your home, contingent on certain factors, such as your home decreasing in value or having a second mortgage. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Avoid filing for bankruptcy if you make more money than your monthly bills. Although bankruptcy may feel like a simple method of getting out of your large debt, it leaves a permanent mark on your credit history for up to 10 years.
There are many ways to resolve financial difficulties other than bankruptcy, and you should investigate all of them first. For example, you can always talk with a lawyer to see about different options through creditors or other means that will not require wiping the entire slate clean. For example, if you are in talks of foreclosure, you could use a modified loan to overcome your debt. A good lender will be able to assist you in a variety of ways, from getting rid of your late charges to reducing interest rates. You may even be able to get a loan extension, giving you the extra time you need to pay your debt off. When all is said and done the creditors just want their money, and more often than not will work with you on a repayment plan.
Before filing for bankruptcy under Chapter 7, make sure that you consider the implications this will have on any of your co-debtor, who are usually family members, close friends or business associates. You can relieve yourself of any liability for debts that you may share with someone else through a Chapter 7 filing. Creditors, however, will hold the co-signer liable for the entire balance of the debt.
Refrain from feeling shameful about your bankruptcy. This process is less that glamorous, and it makes most people lose their self-esteem. Although dealing with a bankruptcy is stressful, try to focus on the positive. Remembering to stay positive as you go through financial difficulties is a great way to deal with your bankruptcy filing.
Review bankruptcy rules before you file your petition. There are many traps in the bankruptcy laws that could trip up your case. You might find that your case become dismissed because of a mistake. Take the time to research personal bankruptcy before moving forward. Doing so will make the process a lot easier.
Consider other options prior to filing for personal bankruptcy. You may want to consider credit counseling. There are a number of companies that will assist you, many of which are non-profit. Their job is to lower your payments and interest through negotiations with your creditors. They collect payments from your and then pay the creditors.
You should immediately vow to be more financially responsible before you actually file for bankruptcy. In other words, you do not want to waste your efforts here by starting to ring up more and more debt. When looking at your situation, a judge will take both your past and current credit history into consideration. Every little bit of good financial behavior helps, so you should behave as responsibly as possible prior to filing.
Proceed with your bankruptcy plans even if you obtain new employment before your filing date. It is possible that bankruptcy is still your best course of action. The timing of filing is a huge factor. Repayment can be evaluated without new income if the filing is posted earlier.
Even if your personal and financial situation is quite horrifying, it’s important that you be completely honest when discussing it with your lawyer. Lying about assets, debt or income can have damaging effects on your future. It’s also illegal. If you fail to declare certain assets or debts, you may be held criminally liable for the omission if it was found to be intentional.
Once you have settled on filing for bankruptcy, learn all there is to learn about your state’s bankruptcy laws. By learning as much as possible before, during, and after your bankruptcy you can help set yourself up for a better financial future.
While no one wants to go through bankruptcy, at times it cannot be avoided. Having read the preceding piece, you now possess critical insight and knowledge offered by those with actual prior bankruptcy experience. Learning from others who have filed for bankruptcy is the best way to ensure that you make intelligent decisions and avoid making any mistakes.