Bankruptcy: What You Need To Know

It’s not a good sign when somebody is filing for bankruptcy. If you are contemplating filing for bankruptcy, it means that you are in a dire financial situation. Follow the steps presented here to determine whether or not you need to file for personal bankruptcy at all.

Retirement Accounts

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. You should make every effort to leave your retirement accounts untouched until your retire. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.

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. A great way to rebuild your credit is to apply for a prepaid credit card. This will be a demonstration of the seriousness with which you view rebuilding your credit rating. Unsecured credit may be offered to you quicker than you think after doing so.

You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. To find an itemized list detailing assets exempt from bankruptcy, find the Bankruptcy Code. You need to read the exemptions for your state, so you know what property you can protect. It is important to know what types of possessions may be taken away before they actually are seized.

Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. It is important to meet with the actual lawyer, because paralegals or assistants cannot give you legal advice. Interviewing multiple attorneys is a good way to find the best fit.

Be sure you have no other choice but to seek bankruptcy. Perhaps just consolidating some of your existing debt, could make them easier to manage. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. The future of your credit will be greatly affected. This is why you must make sure bankruptcy is your last resort.

Chapter 13

Research Chapter 13 bankruptcy, and see if it might be right for you. If you owe an amount under $250,000 and have a consistent income source, Chapter 13 may be right for you. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.

Remember to spend some quality time with your loved ones. Going through a bankruptcy can be an excruciating experience. It is long, full of stress and leaves individuals having feelings of shame and guilt. There are a number of people who wish to go into seclusion while undergoing the process of personal bankruptcy. But, keeping to yourself is likely to cause even greater sadness and despair. For this reason, if you are undergoing personal bankruptcy proceedings, you must continue to live a normal life, spending time with your friends and relations.

Before ultimately deciding whether or not to file for bankruptcy, be sure to weigh the different options available to you. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. If you are facing foreclosure, consider a loan modification plan. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. Creditors want their money. Often, they are willing to work out repayment plans with you in order to get it.

File when the time is perfectly right. Proper timing is important, especially when it comes to personal bankruptcy. There are occasions where it pays to delay and others where a quick decision is the best option. Speak with a lawyer specializing in bankruptcy in order to learn when you should file your petition.

As you can see, you don’t need to surrender to bankruptcy. What you’ve learned from this article can put you on a corrective path, use it wisely. Apply what you’ve learned here to make changes in your life that will not hurt your credit.