Many people look down on people who have to file for bankruptcy, and then find themselves in the same situation. A simple change of circumstances, such as job loss, can quickly change a life to the point where bankruptcy may be the only way out. If this situation proves to be yours, you can help yourself with the contents of this article.
When it gets time to think about bankruptcy, avoid using your retirement or savings to pay off the creditors or even make attempts to settle the debt. You should never touch your retirement accounts, unless you have absolutely no choice. You may need to use some of your savings; however, you should not use all of your savings. Remember that you must safeguard your future financial security.
Unsecured Credit
You may still have trouble receiving any unsecured credit after a bankruptcy. If this happens to you, think about applying for a couple of secured credit cards. Having a credit card of any type will allow creditors to realize that you’re attempting to work in the right direction to repair your credit. Once you’ve built up a history of on-time payments, you may start getting unsecured credit again.
Do some research to find out which assets you could lose by filing for personal bankruptcy. Certain assets, as listed in the local bankruptcy regulations, are immune from seizure during bankruptcy. It is vital that you know the things on this list prior to filing for bankruptcy, in order to determine which of your possessions will be taken away. This will ensure that you do not have any surprises once you have filed bankruptcy.
Don’t hide assets or liabilities when filing for bankruptcy. Regardless of the agency you file with, ensure that you tell them all they should know about your current financial situation, regardless of how good or bad it is. Being honest is both the right thing to do and, moreover, it is required by law.
Be persistent in researching information about filing for bankruptcy and consult a qualified personal bankruptcy attorney. If you’ve had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy. Filing for bankruptcy may allow you to regain ownership of recently repossessed property. Consult with a lawyer who is able to assist you in the filing of your petition.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. Make your decision after all of your questions have been answered. It is not necessary to come to a decision immediately following the meeting. That gives you the chance to speak to a number of lawyers.
Check into less drastic solutions prior to declaring bankruptcy. For example, consumer credit counseling programs can help if your debt isn’t too large. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
Ensure that you bankruptcy is your best choice. Consolidating current debt could make it easier to manage. Bankruptcy cases are long, anxiety-filled experiences. You will have trouble getting credit down the line. Because of this, you need to think of bankruptcy as a nuclear option; that is, a last resort.
Chapter 13 Bankruptcy
Consider Chapter 13 bankruptcy, if you chose to file. If you have a regular source of income and less than $250,000 in unsecured debt, you can file for Chapter 13 bankruptcy. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Bear in mind that if you miss a single payment that is due under your plan, the entire case will be dismissed by the Court.
Think about all your options before pulling the trigger. You may qualify for alternatives such as debt repayment plans or interest rate reductions. Ask your bankruptcy attorney about these options. If you are looking at foreclosure, think about a loan modification program. 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. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
Don’t forget to enjoy yourself during your bankruptcy. The process of filing for bankruptcy can make people a nervous wreck. Depression can ensue from the stress if action isn’t taken. After you have finished filing for personal bankruptcy, your life will improve.
Make certain that you are fully aware of each and every bankruptcy law prior to even considering filing. For example, it is against the law to transfer any assets from the filer to another for a year before filing. Also, you must never incur significant new obligations must prior to filing for bankruptcy.
Never take huge cash advances directly from your credit cards before you file for bankruptcy, since you know that all debts will be erased from these cards. This fraudulent practice is a demonstration of bad faith. Debts you incur this way will likely not be discharged in a bankruptcy, and you will still have to repay them.
Know that bankruptcy can be much better for your finances than missing payments or making late payments on debts. While bankruptcy will show up in you credit file for the next 10 years, you can begin the process of making your credit situation better right away. One of the benefits of bankruptcy is a relatively fresh start.
After exhausting every avenue for resolving your financial debts, bankruptcy may be a necessity. You need not stress out, if your circumstances have brought you here due to things outside your personal control. You may be better prepared for the bankruptcy process after you’ve taken taken a look at this article.
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