As you probably know, the economy is in the toilet. With a recession comes an inevitable increase in unemployment and personal debt levels. Deep debts usually wind up in bankruptcy. This is not a pleasant situation. If you would like to know how to get yourself or your friend out of filing for bankruptcy, read on for some possible answers.
Prior to filing for bankruptcy, be sure you have investigated all of your alternatives. Avail yourself of other options, including consumer credit counseling, if they are appropriate for your situation. If you file for bankruptcy, a mark is permanently left on your credit. Therefore, before you do this, you should utilize all the other options that you have.
When it appears likely that you will file a petition, do not start spending your last remaining funds on debt repayment. Avoid touching your retirement accounts whenever possible. Though you may need to use a bit of your savings, try hard to maintain some of your reserves so that you have some degree of flexibility going forward.
Secured Card
Getting unsecured credit post-bankruptcy will likely be difficult. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. Using a secured card not only helps to rebuild your credit, but it also keeps you from going more in debt with credit card bills. Unsecured credit may be offered to you quicker than you think after doing so.
If you can, get a word-of-mouth referral for a lawyer. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
If you are seriously thinking of filing bankruptcy, make sure that you contact an attorney. There are a lot of things to do during bankruptcy and that may be hard for you to understand on your own. A specialized bankruptcy lawyer can ensure that you are handling your bankruptcy filing the right way.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. One example would be that a consumer credit program for counseling if you have small debts. You may have luck negotiating lower payments by dealing directly with creditors, but be sure to document any get and new agreement terms in writing from each creditor.
Chapter 13
Make sure that you understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. Chapter 7 bankruptcy completely wipes out your debt. You will no longer be liable for any money that you owe to your creditors. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. Take the time to learn more about these different options so you can make the best decision possible.
Always protect your house. Filing for bankruptcy will not always result in losing your home. Depending on whether the value of your home has decreased or if you have a second mortgage on the home, you may end up keeping it. You could also check out the homestead exemption. This lets you continue living in your house, depending on whether you meet certain financial requirements.
Interest Rates
Investigate other alternatives before resorting to bankruptcy. A lawyer that specializes in bankruptcy law can help advise you of other options, such as repayment plans and reducing interest rates to relieve some of the burden. Loan modification plans can help if you are dealing with foreclosure. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. When all is said and done the creditors just want their money, and more often than not will work with you on a repayment plan.
Filing for bankruptcy can cause stress. Engage a competent lawyer in order to avoid excess stress and keep everything on track. Get recommendations and look into other qualifications rather than just choosing based on cost alone. The most expensive attorneys are not necessarily the best ones. Rely on word-of-mouth referrals from others who have filed for bankruptcy, check the BBB, and take advantage of free consultation offers. If you really want to check up on them check out how well they do at court hearings.
Personal Bankruptcy
Before you file your petition, be sure that you understand personal bankruptcy rules. Your case may be rife with issues due to pitfalls inherent in codes regarding personal bankruptcy. Small errors could even cause your case to be dismissed. Make sure you have a decent understanding of the bankruptcy process before you proceed. This will help your process go smoother.
Bankruptcy will erase debts. Don’t create any new debts before filing for it. To do this would be considered fraud. Even after filing for bankruptcy, you might be forced to repay money gained in this manner.
If you’re continuously making delinquent payments and are constantly missing payments, filing for bankruptcy might just be a kinder, gentler solution for you. The good news here is that, even though the bankruptcy claim will leave a decade-long stain on your credit score, you can still work to repair your credit. The main benefit to filing for bankruptcy is the chance at a new start.
You don’t necessarily have to forfeit all your assets when you file for bankruptcy. It is possible for you to keep your personal property. This covers items such as clothing, jewelry, electronics and household furnishings. Depending on the state you are from, what kind of bankruptcy you’re filing, and your specific case, you could be allowed to keep bigger items, like your car or house.
The economy is showing signs of recovery, but unemployment and underemployment are still high. That said, it is possible to avoid bankruptcy even if you are having cash flow problems. Simply remain persistent and positive. Opportunities will eventually come your way. Keep these thoughts close and it will enable you to have a better chance of avoiding the need to file bankruptcy. Hopefully better things await you in the near future.
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