The decision to file bankruptcy is difficult, but sometimes unavoidable. It’s best to make the decision of filing for personal bankruptcy after doing a little research and gaining a clear understanding of the topic. Keep reading for information that can help you get through this trying time.
When people owe more than what can pay, they have the option of filing for bankruptcy. When you are faced with this issue, begin to familiarize yourself with your state’s laws. The laws governing bankruptcy vary from state to state. Your home is safe in some states, but in others it’s not. See to it that you understand the bankruptcy laws in the area that you live prior to filing.
Visit web sites and read information to learn as much as possible about the topic of personal bankruptcy. Many sites, including the U.S. Check out the Bankruptcy Institute site and do some research about consumer’s rights. The more you know, the better equipped you’ll be to make the wise decisions needed for a successful bankruptcy.
Unsecured Credit
You might experience trouble with getting unsecured credit after filing for bankruptcy. Look into getting a secured credit card in order to get back on your feet with building credit. By doing this, you will be letting people know that you want to fix your credit score. After a while, you may be able to get unsecured credit again.
Always protect your house. Filing for bankruptcy doesn’t automatically involve losing your home. You might be able to keep your home, for instance, if you have two mortgages or if your home has lost its value. Check to see if you pass the requirements necessary to file for a homestead exemption.
Learn the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Weigh all the information you can find on- and off-line to make an educated decision. If anything you see is unclear or doesn’t make sense, go over it again with your attorney before making the final filing decision.
Don’t file for bankruptcy if it is not completely necessary. Sometimes consolidating your existing debts can make them more manageable. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. It will also harm your ability to secure credit in years to come. Needless to say, if some alternative strategy will allow you to take care of your debts, you should give it a try before resorting to bankruptcy.
Chapter 13
Consider Chapter 13 bankruptcy. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Bear in mind that if you miss a single payment that is due under your plan, the entire case will be dismissed by the Court.
If your earnings are higher than your expenses then filing for bankruptcy is a waste of time and money. Although you may see bankruptcy as a free pass to eliminate your debt, if you can slowly whittle away at your debt with your income, it will be much better than killing your credit score with a bankruptcy filing.
While the idea of bankruptcy sounds terrible, sometimes you can’t avoid it. Here you have found some great advice and help to guide you in your bankruptcy. Know that you are not the first, and surely not the last. You will find this experience less difficult knowing that others have done it before you and survived by following these tips.
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