The economy is in very bad shape right now. The result of the dreadful economy is that many people are losing their jobs and falling into uncontrollable debt. Many of these debts end up in bankruptcy filings, which just makes the problem worse. If you, a friend, or a loved one is in financial trouble, this article could help decide if bankruptcy is the right option.
Do not use your retirement fund or savings to pay off creditors. You should not use your retirement savings unless the situation calls for it. 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.
If you know people who have filed for bankruptcy, ask them who they would recommend rather than relying on Internet reviews or worse, just randomly picking someone out of the phone book. Although you may find a good lawyer through an advertisement, you can simply find a much better lawyer if the lawyer is recommended to you by someone who has gone through the process and who has the inside track on the lawyer’s true capabilities.
Free Consultations
Find a bankruptcy attorney who offers free consultations, and ask lots of questions. Free consultations are standard practice among bankruptcy lawyers, so interview multiple candidates before making a final decision. Only choose an attorney once all your concerns are answered to your satisfaction. You need not decide right away. You can take as much time as you need to meet with different lawyers.
Be aware of recent changes, if any, in the bankruptcy code. Bankruptcy laws constantly change and it’s crucial you know about them so you the process of filing for bankruptcy goes smoothly. To learn about the changes, you should check out the website of your state’s legislation or you can call their office.
Take the time to find a simpler solution to your financial issues, before filing for bankruptcy. You could find relief from small debts by using a consumer credit counselor. Negotiating with creditors is another option, but creditors are notorious for “forgetting” these agreements, so get them in writing!
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. The Chapter 7 variety can help you eliminate your debts almost entirely. You will be removed from any contracts you have with your creditors. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
Safeguard your home. Bankruptcy doesn’t always mean you’ll lose your home. There are mitigating factors, such as lose of value, or multiple mortgages. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Chapter 13 Bankruptcy
Consider Chapter 13 bankruptcy for your filing. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Consider that if you even miss one payment, your case will not be considered by the court.
If your paycheck is larger than your debts, avoid filing for bankruptcy. While bankruptcy may seem like an easy way out of having to pay back all of the debt that you owe, it is a stain that will remain on your credit report for seven to ten years.
If concerned about keeping possessions like a car, find out if your attorney can reduce the payment. It is possible to get your car payment lowered if you file using Chapter 7. Here are the qualifications in regards to your vehicle: you must have bought it nine hundred and ten days or more before filing for personal bankruptcy; your loan must carry high interest; your work history must be steady and solid.
Although the economy appears to be improving, there are many, like you, who are still struggling financially. Even without steady income, there are things you can do to avoid bankruptcy. With any luck, you now see that options exist to help you steer clear of bankruptcy. I wish you the best of luck.
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