Sadly, bankruptcy is an increasingly widespread phenomenon of late. Most people cite the economy for having to file for bankruptcy. However, before selecting this option make sure you know everything you need to know before you head too far down the path. Keep reading for the knowledge you need.
After you have declared bankruptcy, you may have a hard time being approved for unsecured credit. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. This will allow you to start building a good credit history while minimizing the bank’s risk. After some time passes they may be willing to offer you unsecured credit.
It is important to list all your assets and liabilities during the bankruptcy proceeding. Failure to do so will only cause you problems in the end. It is important that you are completely transparent, showing everything financial that needs to be known. Don’t withhold information, and create a smart way of coping with the reality of the situation.
Stay up to date with any new bankruptcy filing laws. Bankruptcy law evolves constantly, and it’s important to stay up-to-date to ensure that you file properly. To learn about these changes, try contacting your state’s legislation office or checking their website.
Chapter 7
You may have heard bankruptcy referred to differently, either as Chapter 7 or Chapter 13. Learn the differences between the two before filing. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. All happenings with creditors will disappear. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
Talk to an attorney about reducing your car payments so that you can keep your vehicle. Lower payments can sometimes be structured into a Chapter 7 solution. If you meet the criteria specific to your state, it may be a good option to consider.
Before you decide to file for Chapter 7 bankruptcy, you should consider what your bankruptcy might have on others, as your family and friends may be affected. If you choose Chapter 7, you are no longer responsible for joint debts. However, creditors will want to hold your co-signer responsible completely.
It is possible to get an auto loan or mortgage during the repayment period for Chapter 13 bankruptcy. However, it will be a longer and more arduous task. Your trustee can help you acquire a new loan. When you meet with your trustee or financial adviser, make sure that you come up with a sound budget proposal. You will need to be able to explain why the purchase is necessary.
Make certain that you are fully aware of each and every bankruptcy law prior to even considering filing. For instance, you need to know not to shift assets into someone else’s name in the year leading up to your filing. In addition, it’s unlawful for a filer to acquire more debt on their credit cards before they file.
Be careful on how you pay your debts before you file a personal bankruptcy. Check the bankruptcy laws in your state to make sure you have not done anything in the past year to make yourself ineligible to petition for bankruptcy. Before making any final decision concerning your finances, you should be educated on the rules of bankruptcy.
As noted in the beginning of the article, bankruptcy is a hot topic nowadays, mostly because of the state of the economy. Let the advice you have received from this article be a guide to help you make the right choices for you and your finances.
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