It is common for those who face bankruptcy to experience feelings of despair, rage, frustration and sadness. Many live with the constant fear of being unable to repay their debts while also maintaining a decent standard of living. They think they are stuck, but they really aren’t, and neither are you, thanks to the following tips.
When people owe more than what can pay, they have the option of filing for bankruptcy. If you find yourself needing to file for bankruptcy it is important to familiarize yourself with the state laws. Most states differ in their laws governing bankruptcy. In some areas, your residence may be completely exempt, but in others, it will not be. Make sure you know the laws where you live before you file.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. Generally speaking if you can discharge the tax, you can discharge the debt. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
Most bankruptcy lawyers offer a free consultation, so meet with several before you decide on one. Make sure you meet with a licensed attorney rather than a paralegal or assistant, because it is illegal for these people to give legal advice. Take some time to talk to different lawyers to find one that fits your needs, and meshes well with you.
Know and understand the difference between filing for Chapter 7 bankruptcy versus Chapter 13 bankruptcy. Weigh all the information you can find on- and off-line to make an educated decision. Go to a specialized lawyer to ask your questions and get some useful advice on what to do.
Chapter 13
You could see about filing for Chapter 13 personal bankruptcy. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. The window for Chapter 13 repayments is typically 3-5 years. At the end of this time, any unsecured debt is discharged. Keep in mind that missed payments will trigger dismissal of your case.
Before ultimately deciding whether or not to file for bankruptcy, be sure to weigh the different options available to you. There are many other options including debt consolidation and making payment plans with your creditors. If you are facing foreclosure, consider a loan modification plan. Your creditors will be willing to work with you to allow you to pay off your debts. They may be able to take late fees off of your account, cut down your interest, or even extend the loan’s repayment period. Remember that creditors desire to get paid and usually debt repayments are often preferable when dealing with bankrupt debtors.
Once your initial filing is complete, it is time to take some time to relax a little. Filing is the most intensive step in the process, so afterwards it’s important to let go of some of your stress. Depression and burn-out from pent of stress will do nothing to help your situation, so it is critical to let go a little. After you have finished filing for personal bankruptcy, your life will improve.
If you are worried about your car being repossessed, consult your attorney about trying to get the monthly payment lowered. Chapter 7 usually can help payments be lowered. For instance, you can get lower payments on you car if you purchased it before filing and took a loan with high interests on it.
Make sure you understand your rights as you file for bankruptcy. Certain unscrupulous creditors will try to convince you that certain debts can’t be discharged in bankruptcy. Most loans can be discharged outside of certain things, like child support or loans you are paying back due to student lending. If any debt collectors tell you that their debts can’t be bankrupted, make a report with your state attorney general.
Going through bankruptcy is tough and can be mentally and emotionally draining. Be certain that you hire a competent lawyer to minimize the stress and anxiety you are under. Do not solely use cost to determine whom to hire. While the person you select does not have to cost the most, they should be competent and reliable. Ask your friends, relations and acquaintances who have shared your experience to give you referrals to good lawyers. If you want to know more about a specific lawyer, attend a court proceeding and see how the attorney handles herself.
Filing for bankruptcy isn’t the end of the world. It may be difficult at first, but you can overcome bankruptcy. Keep the advice here in mind so that you can work toward getting back on your feet!
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