You should know that you are not alone if you feel overwhelmed by debt. One day you’re looking at a little mole hill; the next day you’re staring down a mountain. It doesn’t take long at all before the debt becomes too much to handle. Although it is a long and difficult process, there are ways to get through it unharmed and restore your finances. Continue reading to learn great advice to help you understand what you need to know about bankruptcy and debt.
Lots of people have to claim bankruptcy when their bills are larger than their income. If this describes your situation, it makes sense to become familiar with relevant laws. Every state is different when it comes to dealing with bankruptcy. Your home is safe in some states, but in others it’s not. Do not file before learning about the bankruptcy laws in your state.
When it gets time to think about bankruptcy, avoid using your retirement or savings to pay off the creditors or even make attempts to settle the debt. Do not tap retirement accounts unless there is no other alternative. Although you may need to tap into your savings, you should not use up all of it right now and jeopardize the financial security of your future.
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 to you, think about applying for a couple of secured credit cards. This at least shows you are making an honest attempt at reestablishing your credit worthiness. After some time passes they may be willing to offer you unsecured credit.
When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. There are various companies that prey on the financially desperate, so you need to find someone you can trust to ensure the process goes smoothly,
Be honest when filing for bankruptcy, because hiding liabilities or assets can only cause trouble to you. Wherever you file, that court has to be made aware of all details regarding your finances, positive and negative. Don’t hold anything back and formulate a smart strategy to deal with the reality you are facing.
Safeguard your home. Filing for bankruptcy does not mean you have to lose your home. Depending on whether the value of your home has decreased or if you have a second mortgage on the home, you may end up keeping it. You are still going to want to check into homestead exemption either way just in case.
Become knowledgeable in regards to details about chapter seven bankruptcy vs. chapter 13 bankruptcy. Read up on the topic and familiarize yourself with the benefits and drawbacks of both variations. Learning about bankruptcy is not simple, so call a bankruptcy attorney to make an appointment to ask questions.
Chapter 13
You could see about filing for Chapter 13 personal bankruptcy. If you owe an amount under $250,000 and have a consistent income source, Chapter 13 may be right for you. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Keep in mind that filing for Chapter 7 bankruptcy may affect other people than just you, including family members, and in some cases, business associates. Once you complete a Chapter 7 bankruptcy, you will be free of any responsibility of debt, which could put all responsibility on someone close to you. However, creditors will want to hold your co-signer responsible completely.
Don’t drag your feet when it comes to filing bankruptcy. It is a big mistake to avoid financial problems, thinking they may go away on their own. Your debt can quickly get way too large, and as a result, you may discover that you must foreclose your home or garnish some of your wages. Once you’ve decided that you can’t manage your large amount of debt, it’s time to contact a qualified attorney.
As you’re well aware of by now, it doesn’t take long to find yourself drowning in debt with no way out. The above article has provided you with advice to allow you to handle your finances and deal with the option of bankruptcy. Use this information to make a fresh start!
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