If you have been threatened by repossession of your possessions, it is time to think about filing for bankruptcy. Consider your finances and put an end to creditor calls, by petitioning for personal bankruptcy. To make your way through filing for bankruptcy smoothly, follow the tips presented in this article.
It is simple math; when you owe more than you are able to pay off, a bankruptcy is the likely solution. If this applies to you, be sure that you know what the laws of your state are. Bankruptcy rules vary by jurisdiction. For example, the personal home is exempt from being touched in some states, but not in others. It is important to understand the laws in your state before filing for bankruptcy.
Think through your decision to file for bankruptcy carefully before going ahead with it. You can find services like counseling for credit that consumers can use. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. Unless there is no other choice a retirement account should not be used. If you have to use a portion of your savings, make sure that you save some to ensure that you are financially secure in the future.
Always be honest when filling out paperwork. 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.
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. If this happens, instead you should turn your attention to secured credit cards. This demonstrates to creditors that you are making a good faith effort to repair your credit. After some time passes they may be willing to offer you unsecured credit.
Be as honest as you possibly can when filing for bankruptcy; hiding liabilities or assets will only hurt you in the long run. Your bankruptcy lawyer has to know every detail of your finances, whether bad or good. Do not hold back anything, and form a sound plan to make peace with your reality.
Chapter 7 Bankruptcy
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. In Chapter 7 bankruptcy, your debts are all eliminated. Your ties with all creditors will get dissolved. Bankruptcy under the rules of Chapter 13, on the other hand, require you to work out a payment arrangement to pay back the agreed upon amounts. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. It is important to meet with the actual attorney, not the attorney’s assistant or paralegal; those people are not permitted to give legal advice By meeting with several attorneys through a free consultation you will be able to choose which attorney you feel more comfortable with.
Your most important concern is to protect your home. Filing for bankruptcy does not mean you have to lose your home. You might be able to keep your home, contingent on certain factors, such as your home decreasing in value or having a second mortgage. Otherwise, try looking into house exemptions that may let you remain in the home if you meet certain financial threshold requirements.
Find out more about Chapter 13. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. Expect to make payments for up to 5 years before your unsecured debts are discharged. However, if you were to miss a payment, the court would dismiss your case right away.
Although bankruptcy is an available option, it is best you look for alternative solutions first. Keep in mind that debt consolidation offers can be scams that do little more than get you into more financial trouble. Take what you’ve just learned to heart, and make wise financial decisions going forward.
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