Bankruptcy: Is It Right For You?

Many people think people who file for bankruptcy are deadbeats, but change their tune when their debts become untenable. You never know what is going to change in your life. For example, you could lose your job or get divorced from your spouse, which could cause you to be forced to claim bankruptcy. If this situation proves to be yours, you can help yourself with the contents of this article.

If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. If this sounds like you, start familiarizing yourself with your state laws. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. In some areas, your residence may be completely exempt, but in others, it will not be. Make sure you know the laws where you live before you file.

If you are feeling like you are seriously going to have to file for bankruptcy then do not clear out your savings. You should not use your retirement savings unless the situation calls for it. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.

Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. If this happens to you, think about applying for a couple of secured credit cards. You can exhibit your desire to rebuild your credit this way. Eventually, you could be able to obtain unsecured credit.

Keep at it! Once bankruptcy has been filed, you may be able to regain possession of items such as electronic goods or cars that were taken away from you. Filing for bankruptcy may allow you to regain ownership of recently repossessed property. Talk with an attorney who can guide you through the process of filing a petition.

Protect your home. Filing for bankruptcy will not always result in losing your home. You might be able to keep your home, for instance, if you have two mortgages or if your home has lost its value. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.

Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Weigh all the information you can find on- and off-line to make an educated decision. Ask your bankruptcy lawyer to clarify anything you don’t understand before making a final decision about which type of bankruptcy to file.

Chapter 13

Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation 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. Just know that missing one payment could cause your case to be dismissed.

If your income exceeds your obligations, you should not seek bankruptcy protection. While filing may seem simple and a way to get out of paying your debts, it does tremendous amounts of long-term harm to your credit report.

Don’t forget to enjoy yourself during your bankruptcy. A lot of debtors usually get stressed when they file. Stress easily leads to depression, if you are not maintaining control of your emotions. Once the process is complete your life will improve.

Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. But, it could be harder. You will need to secure the trustee’s approval for any new debt obligation. To show that you are responsible and prepared for the undertaking of a new loan, flesh out a full budget. Be ready to justify the purchase that you need the loan for, too.

Banish the word “shame” from your vocabulary before you file for bankruptcy. Often, with bankruptcy, come feelings of guilt, shame and worthlessness. But, there is nothing positive about feeling this way and it can actually affect your mental state. If you want to cope with your bankruptcy filing successfully, you must maintain a positive point of view.

It is important to not wait for the final minute to petition for bankruptcy. For some people, they tend to ignore their poor financial situation and just wishing it away, but that is only putting you in more danger. Debt can become a big problem rapidly, and if you fail to handle it, you can face foreclosure or garnishment of wages. As soon as you find yourself experiencing financial problems, take action and discuss your options with a bankruptcy attorney.

Financial Information

If you have to file for bankruptcy, ensure that you supply all your financial information. Failing to disclose all of your financial information can cause your bankruptcy petition to be dismissed, or, at the very least, delayed. You might think some asset or debt isn’t worth bothering with, but you should disclose it just to be on the safe side. This may include secondary employments, vehicles you own and loans you still owe money on.

If you have attempted every option open to you to bring your finances under control, but have been unsuccessful, bankruptcy may be the final option. If life has brought you here, there is no reason to stress yourself out. Apply the advice from this article to help ease your burden when filing for bankruptcy.