In order to file a bankruptcy claim, you will run into more than a couple of complicated hurdles to jump. Because of the various types of claims out there, and also the different ways in which you can approach filing, your particular situation will be personal to you. Learn as much as you can about the topic before you make any decisions regarding filing. The below advice can assist you in beginning.
Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If this is your case, you should do some research about bankruptcy laws in your state. Bankruptcy laws vary from state to state. For instance, your home might be protected in some states while you might lose it in others. Become acquainted with local bankruptcy laws before filing.
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. Avoid touching your retirement accounts whenever possible. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.
Prior to filing for bankruptcy, discover which assets cannot be seized. There are some assets that cannot be seized through bankruptcy, and the law lists those assets. Make sure that you carefully look over this list prior to filing to discover if your valuable assets will be seized. It is important to know what types of possessions may be taken away before they actually are seized.
Bankruptcy Laws
Before you file, make sure you understand current bankruptcy laws. Make sure to get the most up-to-date information concerning the bankruptcy laws in your state. All of these changes will be addressed on the state’s legislative site. You can also contact them directly by phone or office visit.
Make sure your home is safe. Filing for bankruptcy does not always mean you will end up losing your home. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. You may also want to check out the homestead exemption because it may allow you to keep your home.
Consider any other options available before filing for personal bankruptcy. One of these choices is consumer credit counseling. There are many non-profit debt counseling services available. They can negotiate with each of your creditors to work out payments that you can afford, along with reduced interest rates. Once you pay them, they make the payments to your creditors.
Avoid making payment that might interfere with your filing. There are bankruptcy laws which forbid repayment of some creditors within three months before filing. In the case of family members, this period of time may extend to a full year. Know what the laws are prior to making any payments.
Don’t wait when you’re thinking about filing for bankruptcy and have been for a while. It can be difficult to ask for help, but as you wait, you accrue more debt. Speaking with a professional quickly will provide you with the advice you need before things spiral out of control.
It is possible that a bankruptcy might actually be smarter over the long term than struggling month to month with consistently late or missing payments. Bankruptcy stays on your credit for quite some time. On the other hand, you can begin improving your damaged credit immediately. Bankruptcy can give you the fresh start you need.
Remember that just because you have filed for personal bankruptcy it will not cause you to lose everything you own. You can keep personal property. This may be things like jewelry, clothing, furniture and electronics. This will depend on your state’s laws, the type of bankruptcy you file for, and your financial situation, but you may be able to retain large assets like your home and car.
After a few months have passed since your bankruptcy finished, go to the credit reporting agencies and get your credit report. Check that your reports accurately reflect all your closed accounts and discharged debts. Resolve any problems immediately so you can build up your credit score as quickly as possible.
Chapter 7
If you cannot qualify for a Homestead Exemption once you have filed for Chapter 7 bankruptcy, try filing for Chapter 13 as well. You may be better off converting your Chapter 7 filing to a Chapter 13 bankruptcy, and it is important to talk to an experienced attorney regarding your next move.
Do not wait to file for bankruptcy. Waiting to file will not make things easier. Waiting to file may increase your stress levels and give creditors a chance to repossess items your would otherwise be allowed to retain. There are many lasting, negative effects this can cause. The sooner you file, the sooner you can begin to rebuild.
Don’t lie or try to cover up any facts when you file for bankruptcy. Anytime you hide something from the court it can be grounds for them to dismiss the petition right away. Make sure all assets and income sources are accounted for when you file your petition. This shows the court that you are working to resolve the matter as quickly as possible.
You are now aware that filing for bankruptcy is a choice that is one you should think through thoroughly prior to committing. If you choose bankruptcy as a financial answer for your situation, you can only benefit from having a lawyer dedicated to this industry to help you out.
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