Bankruptcy is a tough decision, one that should be given a lot of thought. Read through the information in this article and use it to help you make an informed decision. Prepare yourself by learning as much as possible beforehand.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. Study the laws in you state to learn what you need to do and what your options are. When it comes to bankruptcy, states have varying laws. In some areas, your residence may be completely exempt, but in others, it will not be. Before filing for personal bankruptcy, be certain that you are familiar with the laws.
Ask yourself if filing for bankruptcy is the right thing to do. There are other options available, such as credit counseling for consumers. Bankruptcy stays on your credit for a whole decade, so if there are less drastic options that will solve your credit problems, it is in your best interest to make use of them.
When it soaks in that filing for personal bankruptcy, don’t use all of your retirement funds, or all of your savings to resolve insolvency or pay creditors. Leave your retirement accounts untouched unless there is absolutely no other alternative. You may need to withdraw some funds from your savings account, but don’t take everything that is there as you will be bereft of any financial backup if you do.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. Lying on your filing can cause dire consequences such as: delays, penalties, being prevented from re-filing, or even jail time.
If you are planning to file for bankruptcy, be sure to learn what types of assets you will be able to keep and which can be seized. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
Do not attempt to conceal any assets when filing for bankruptcy because you may be penalized when they are discovered. The lawyer representing you when you file needs to have full knowledge of your financial situation. Being honest is both the right thing to do and, moreover, it is required by law.
Chapter 7 Bankruptcy
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. Any ties that you have with creditors will be dissolved. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. Both options have advantages and drawbacks, so do your research before deciding.
It is important to understand clearly the benefits of a Chapter 7 or 13 bankruptcy. Do some research about these options so you can choose the best one. If you don’t understand the information you researched, consult with your attorney about the details before you decide which type of bankruptcy you want to file.
Investigate your other alternatives before you decide you have to go with bankruptcy. You may be able to get away with going through debt consolidation to help make the payments easier to deal with. It can be quite stressful to undergo the lengthy process of filing for personal bankruptcy. It will also make it tough for you to secure credit after your filing is complete. Because of this, you need to think of bankruptcy as a nuclear option; that is, a last resort.
Consider Chapter 13 bankruptcy. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
Don’t file for bankruptcy the income that you get is bigger than your bills. The cost to your credit history far outweighs the simplicity of the easy-out bankruptcy. This is a hard pill to swallow for many.
If you’re concerned about the details of keeping your car, try to ask your attorney about details regarding lowering your monthly payments. In many cases, Chapter 7 bankruptcy can lower your payments. Your car must have been purchased more than 910 days prior to filing, be a high interest loan, and you must have had a steady work history for this to work.
It is important to understand your rights when you file for bankruptcy. Many creditors or bill collectors might tell you your debts cannot be included in a bankruptcy. What you can’t file on is very small, like student loans or child support payments. If a collector tries to convince you that some other type of debt, such as a credit card, is non-discharagable, get the company’s information and send a report to your state attorney general’s office.
The article you have just read explains a few different methods you can use when filing for bankruptcy. You must do a wide variety of things correctly. The tips you have read here were designed to give you an advantage when filing. By using them, you can sure that you’re doing everything by the book and that you won’t be caught by surprise.
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