Whatever led you to declare bankruptcy is probably very sad, but that doesn’t mean that you can’t have a better life after bankruptcy. Bankruptcy is all about giving you a fresh start. Don’t look at it as the end of the world; read this article to help you determine how your life will be enhanced by bankruptcy.
Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If this sounds familiar, you should read up on the bankruptcy laws in your state. Different states have different laws regarding bankruptcy. In a few states, they see to it that your house is protected. This is not the case when it comes to other states. It is best to become familiar with your state’s laws regarding bankruptcy before you take the steps to file.
Before filing for personal bankruptcy, make sure you are doing the right thing. You can find services like counseling for credit that consumers can use. 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.
Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. For example, consumer credit counseling programs can help you by renegotiating your debts with your creditors into payments that you can afford. You may also find people will allow you to make lower payments. If that happens, get records of the debt modifications.
Chapter 7
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. In Chapter 7 most of your outstanding accounts will essentially be erased. All creditor relationships will be severed. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Since the majority of attorneys are willing to provide no-cost initial consultations, it is smart to meet with more than one before you make a selection. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. Hiring a lawyer could help you become comfortable with the legal things that you will encounter.
Protect your home. Filing for bankruptcy does not guarantee that you will lose your house. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. If you’re not sure, however, you can always study the particular homestead exemption regulations. You will learn everything you need to know.
Make sure that you act at the appropriate time. Timing is everything, especially in personal bankruptcy filings. In certain situations, you should file right away, but other situations will warrant you waiting. Speak to a bankruptcy lawyer to determine what the ideal timing is for your personal situation.
Prior to filing for bankruptcy, tell yourself that you cannot use the word “shame”. Going through bankruptcy can cause you to lose a lot of self-esteem. Try not to give in to these feelings, as they are of no help to you and they can affect your emotional health. Keeping a positive attitude during worrisome financial trouble is the smartest way to deal with a bankruptcy.
Do some research about bankruptcy laws before filing for bankruptcy. Here is one example, an individual who files for bankruptcy cannot transfer any assets for a year before the filing date. Also, it is illegal to load up your credit cards with debt right before filing occurs.
Prior to filing, do not use your credit card to get a cash advance, knowing your debts will be eliminated. If a creditor notices that activity they can constitute it as fraud and sue to have you pay it all back even after your bankruptcy is complete.
If divorce is in your future, perhaps you should make an effort to resolve the situation before finances become a problem. A lot of people get divorced and immediately have to file for bankruptcy because they didn’t foresee the troubles that were ahead for them financially. Rethinking a plan to get divorced is always a good choice.
No matter how bleak the situation; always be honest. Lying about your assets and debts can get you into serious trouble. Not only will it affect your filing, it is illegal. If you withhold information about these things, you risk spending time in prison!
Be certain that all of the debts you are presenting for consideration in your bankruptcy are actually ones that can be considered. This will save you time and money. Debts like student loans always remain on your report even if you file. For these kinds of debts, you can consult loan consolidation services or credit repair agencies. These services will help you manage and reduce your debts.
In most cases, if your case is dismissed due to an error you’ve made, you’ll have the opportunity to re-file. Keep in mind that you will have automatic stay 30 days from when you file if you do have a case dismissed. It may be possible for you to get an extension if you have the right documentation and reasoning behind any errors you committed.
Don’t automatically assume that a Chapter 7 bankruptcy will discharge all of your debt. Certain debts are secured and will have to be reaffirmed through a new agreement: for instance, student loans cannot be erased by filing for bankruptcy. Here are some of the debts that cannot be discharged under Chapter seven: alimony payments, child support payments and court-sanctioned fines.
In conclusion, most circumstance that lead to bankruptcy are not positive. Use what you have learned and take responsibility for your financial health – turn your life around. If you use these tips, you may be able to use bankruptcy to make your life better going forward.
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