Mention of the word, “bankruptcy” is enough to terrify many. Between rising debt and pressure from the family, it can leave you sleepless at night. If these circumstances sound familiar, you stand to benefit from the tips that follow.
Bankruptcy Laws
When people owe more than what can pay, they have the option of filing for bankruptcy. If you have unmanageable debt, you need to familiarize yourself with regional bankruptcy laws. Different states use different laws when it comes to bankruptcy. For instance, in some states you can keep your home and car, while other states prohibit this. Do not file before learning about the bankruptcy laws in your state.
Make sure you’ve exhausted all other options prior to declaring bankruptcy. Alternatives do exist, including consumer credit counseling. Bankruptcy will leave a permanent scar on your credit report and before you take this huge step, you should search through every available option first, to help try and limit the damage to your credit.
When bankruptcy seem inevitable it is important not to use your retirement funds or emergency savings to pay creditors. No matter what you do, do not touch your personal savings unless there is no other option. 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.
Always be honest and forthright when it comes to your bankruptcy petition. You might feel tempted to not declare certain assets in your bankruptcy in order to protect them from forfeiture, but if you’re found out, the process could take longer, or worse, you might be banned from filing for bankruptcy completely.
Don’t be reluctant to remind your lawyer about specific details he may not remember. You should not take for granted that your lawyer will remember every important detail that you have have told him earlier without a reminder. Do not hesitate to speak up; this is your hearing and your future is on the line.
Before making your decision to file for bankruptcy, double-check to see if other, less drastic options could make sense. If your debt is relatively low, you may be able to manage it with credit counseling. It is sometimes possible to negotiate smaller payment by yourself. If you do this, make sure you save a written record of debt modifications that are negotiated.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Do some research about these options so you can choose the best one. Learning about bankruptcy is not simple, so call a bankruptcy attorney to make an appointment to ask questions.
Chapter 13 Bankruptcy
Research Chapter 13 bankruptcy, and see if it might be right for you. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. The window for Chapter 13 repayments is typically 3-5 years. At the end of this time, any unsecured debt is discharged. Keep in mind that even missing one payment can be enough for your whole case to get dismissed.
Filing for bankruptcy should not be done on a whim. 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. Look into loan modification plans if you need to deal with an imminent foreclosure. Lenders can assist you in a lot of ways, by cutting interest rate charges and cutting off late fee charges. They can also lengthen the loan. At the end of the day, creditors want to get paid, and sometimes a debt repayment plan is preferable to dealing with a bankrupt debtor.
Those who are afraid of bankruptcy are entirely justified; it often can be a frightening experience. You might have been worried about it before, but this article can put those fears to rest. Using the personal bankruptcy advice in this article can help improve your financial situation.
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