Making the decision to file for bankruptcy isn’t an easy one, but sometimes it can be the only way out of a mountain of debt. The best way to approach the situation is with an education about the process. Continue to read this article to learn what has helped others who have filed for bankruptcy.
Before undertaking the bankruptcy process, ensure you have made the correct decision. You have other choices, including consumer credit counseling. Bankruptcy has a negative effect on your credit reports, in that it is permanently there. Before you take this step, make sure all your options have been considered.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. It is necessary to be open regarding both the positive and negative aspects of your financial life. Be completely honest in your paperwork to avoid a situation that may end in severe punishment.
There is hope! Filing for personal bankruptcy may possibly enable you to reclaim your personal property that have been repossessed, like your car, electronics and jewelry items. Any property repossessed within 90 days before filing bankruptcy, may be able to be returned to you. Consult with a lawyer that can walk you through the filing process.
You should not have to pay for an initial legal consultation, and such meetings are great opportunities to ask lots of questions. Most attorneys offer free consultations, so meet with a number of them before you retain one. Don’t hire an attorney who fails to address all your concerns and questions. It is not necessary to decide immediately after your consultation. You could even go to different lawyers for advice.
Before declaring bankruptcy, be sure you’ve weighed other options. Those with smaller debts may find use in a program for consumer credit counseling. You may have the ability to negotiate much lower payments, just be sure any debt modifications you agree to are written and that you have a copy.
Protect your house. Filing for bankruptcy does not always mean you will end up losing your home. If your home value has gone down, or if there’s a second mortgage, you might be able to keep it. You are still going to want to check into homestead exemption either way just in case.
Understand the differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. Spend time researching the advantages and disadvantages of filing for each one of these. Ask your bankruptcy lawyer to clarify anything you don’t understand before making a final decision about which type of bankruptcy to file.
Bankruptcy should not be filed by anyone who makes more than their bills cost. While filing may seem simple and a way to get out of paying your debts, it does tremendous amounts of long-term harm to your credit report.
Chapter 7 Bankruptcy
Think about any co-debtors you have prior to filing for Chapter 7 bankruptcy. A Chapter 7 bankruptcy will relieve you of your legal responsibility to pay any joint debts. But, creditors will ask for the money from your co-debtor.
It is possible to obtain new vehicle and home loans while a Chapter 13 case remains active. However, it won’t be as easy as it may have been to get one prior to the bankruptcy. Normally, the trustee assigned to your bankruptcy must approve any new loan. It is important to make a budget and prove that you are able to afford the payment. Also, you need to be ready to say why you’re going to need the item.
Declaring bankruptcy is not something most people aspire to, but can be unavoidable. Now, equipped with the information from this article, you can handle the process much more completely. Gleaning insight from others who already walked the same path can minimize complications and help to reduce your own stress at a difficult time.
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