Many people are terrified every time to hear the word bankruptcy. Similarly, mounting debt and the inability to sufficiently support oneself and family is another very real fear. If this applies to you, or if you are worried about it happening, this article can help.
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. Companies are constantly popping up, claiming to help, yet only seek to profit from your misery. In ensuring that your bankruptcy is as simple as possible, trusting your attorney makes a big difference.
Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. It is vital that you completely understand which assets are protected and which assets can be seized prior to filing bankruptcy. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
Chapter 7
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. You will be removed from any contracts you have with your creditors. A Chapter 13 filing involves a repayment plan, though. Typically, you will make a partial payment against your debts over the next 60 months before the balance of the debts is lifted. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
Meet with a few attorneys who offer free consultations before hiring one. It is important to meet with the actual attorney, not the attorney’s assistant or paralegal; those people are not permitted to give legal advice By meeting with several attorneys through a free consultation you will be able to choose which attorney you feel more comfortable with.
It is possible to keep your home. Filing for bankruptcy does not mean you have to lose your home. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.
If you’re unsure, then you need to learn what a Chapter 7 bankruptcy can do for you, as opposed to what Chapter 13 does. Take the time to learn about them extensively, and then figure out which one will be best for your particular situation. If you are confused by what you find, be sure to ask your attorney to explain anything that is unclear before you make your decision about filing.
Debt Repayment
Look into all of your options before you choose to file for bankruptcy. Speak with an attorney who specializes in bankruptcy to find out if alternatives, such as a debt repayment plan or a reduction of your interest rates, might be better for you. Look into loan modification plans if you need to deal with an imminent foreclosure. Sometimes your lender will work with you to help pay off your debt by giving you a lower interest rate, forgiving late fees, or extending the time period of your loan. After all is said and done, your creditors will still want their money. For this reason, you may wish to investigate debt repayment programs in lieu of bankruptcy programs.
Don’t forget to enjoy your life once your finances get fixed. So many people become stressed when they file. Stress easily leads to depression, if you are not maintaining control of your emotions. You are getting a fresh start, and things will get better.
Before declaring bankruptcy, it is important to know your rights. Some debtors will try to tell you your debt with them can not be bankrupted. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If you are speaking to debt collectors about another type of debt and they tell you it cannot be discharged, check your local regulations. You can report the collectors to your state attorney general if they are lying about this.
If you are planning to file bankruptcy, avoid taking large cash advances from credit cards thinking that the debt will be erased. That is considered fraudulent behavior, and you can still have to pay the credit card back, bankruptcy or no.
Filing for bankruptcy may damage your credit less than missing debt payments. The good news here is that, even though the bankruptcy claim will leave a decade-long stain on your credit score, you can still work to repair your credit. One of the good things about bankruptcy is that you can start fresh.
Contrary to popular belief, you won’t necessarily lose your assets if you happen to file for bankruptcy. You get to keep your personal property. Items such as family mementos, home decor, furniture, personal jewelry, clothes and more fall under private property. You will need to talk to a bankruptcy attorney to find out whether your local laws and personal situation will allow you to keep your car or home.
Consolidate a list of what you owe. This is what you will use when you file for bankruptcy, so make sure every debt you owe is on the list. Search your financial records to be certain that every amount on your list is exactly correct. Don’t do this process too fast because these amounts won’t get discharged if the numbers aren’t right.
People who are afraid of bankruptcy have good cause to be; the process can be scary and stressful. If you understand all of the ins and outs of personal bankruptcy, you need not fear it. The advice in this article will make the idea of filing for bankruptcy a little easier for both you and your family.
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