Bankruptcy can be both a relief and a major stressor. The negative is that you will have to allow others to delve into your personal financial situation, and be open to it. The positive is that once the process has been completed, you will be debt-free and free of harassment from creditors. This article is filled with useful tips to help you get through bankruptcy.
People generally mostly feel the need to get a bankruptcy filed for when they have more money owed than they can get. If this sounds familiar, you should read up on the bankruptcy laws in your state. Most states differ in their laws governing bankruptcy. In some areas, your residence may be completely exempt, but in others, it will not be. See to it that you understand the bankruptcy laws in the area that you live prior to filing.
Make certain that you comprehend everything regarding personal bankruptcy by studying online. The United States Justice Department, the ABI (American Bankruptcy Institute), as well as the NABCA (National Assoc. Consumer Bankruptcy Attorneys) are excellent sources of information. By being well armed with the correct knowledge, you can be certain of the decision that you have made. Additionally, you will understand the processes necessary to conduct your personal bankruptcy matters in a smooth manner.
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. Unless there are no other options, your retirement funds should never be touched. 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.
60 Month Period
Make certain that you comprehend the differences between Chapters 7 and 13. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. With very few exceptions, the connections between you and your creditors will be severed. With a chapter 13 bankruptcy, a 60 month period of time will be established in which you will repay the as much of your debt as possible. Following the 60 month period of time, the remainder of your debt will be excused. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
Consider if Chapter 13 bankruptcy is an option. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. However, if you miss even one payment, the court will dismiss your entire case.
It is important to look at your financial situation from all possible angles before you decide to file for bankruptcy. For example, you can always talk with a lawyer to see about different options through creditors or other means that will not require wiping the entire slate clean. Loan modification plans on home loans are a great example of this. Your particular loan holders can provide a lot of assistance if you’re just willing to speak with them. You can negotiate lower rates, longer terms, and other means of repayment that may keep you from having to file a claim. Most creditors will be willing to work out an option to avoid not getting paid at all.
Do not forget to enjoy life a little once you get through the initial filing process. Many people feel a lot of stress while they work through the bankruptcy process. This stress could morph into clinical depression, if you fail to adequately address the problem. Remember that your situation is going to improve after you file for bankruptcy.
It is important to understand your rights when you file for bankruptcy. Some debtors will try to tell you your debt with them can not be bankrupted. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If a bill collector attempts to say their bill cannot be discharged, look it up. If they are wrong, report them.
Be sure you’re acting when the time is right. Timing can be critical when it comes to personal bankruptcy cases. In some cases, you should file for bankruptcy right away, but in others, there may be reasons why filing quickly would be a bad idea. Discuss the strategic timing of your bankruptcy with your attorney.
Don’t wait till it’s too late to file for bankruptcy. It is a mistake to ignore your financial troubles, hoping they will go away on their own. Debt can become a big problem rapidly, and if you fail to handle it, you can face foreclosure or garnishment of wages. Consider all possible options before filing bankruptcy.
Know the rules of personal bankruptcy prior to petitioning. The bankruptcy code contains several provisions that can raise serious obstacles in your case. It is even possible to make the sorts of errors that can cause your case to be dismissed. Do as much research as possible about bankruptcy before you file. That way, you will have an easier road.
Think about the pros and cons before filing. Whatever your reason for doing it, keep in mind that information is the strongest ally you have throughout the entire process. These tips can make dealing with bankruptcy easier. Apply all of the knowledge you have gained from this article and you will be on your way to feeling more at ease about your bankruptcy.
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