When filing for bankruptcy, it is best not take the process lightly! Unless you realize every single little aspect of the proceedings to come, you might end up biting off more than you can chew. Use the tips written in this guide to help you go in the proper direction. No matter which decision you make, knowledge is essential.
The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. If this is happening to you, then learn about the laws where you live. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. Know what the laws are in your state before filing.
Think through your decision to file for bankruptcy carefully before going ahead with it. You have other options available like consumer credit counselling services. Bankruptcy stays on your credit for a whole decade, so if there are less drastic options that will solve your credit problems, it is in your best interest to make use of them.
When you document your financial records, it is vital that you are 100% truthful in order to have a successful resolution to your bankruptcy process. You must avoid the temptation to conceal any valuables, money or other assets from the courts. If they find that you have lied, you may be faced with fines, penalties or the inability to file in the future.
It is important to understand your rights when filing bankruptcy. There may still be way to get repossessed items back after you file for bankruptcy. If the repossession occurred within 90 days from your filing date, it is possible that some of your property can be returned to you. Speak to a lawyer who will be able to help you file the necessary paperwork.
See if there is an alternative you can use before declaring bankruptcy. If your debts are really not overwhelming, you may find the assistance you need by consulting a consumer credit counselor. Negotiating with creditors is another option, but creditors are notorious for “forgetting” these agreements, so get them in writing!
The two main kinds of bankruptcy are Chapter 7 and Chapter 13. Make sure you understand them so you know what is best for you. All debt will be eliminated with Chapter 7. Any ties you have concerning creditors will definitely be dissolved. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. When choosing the type of personal bankruptcy that is correct for you, it is very important that you know the differences.
Always protect your house. Bankruptcy doesn’t always mean you’ll lose 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. Another option is the homestead exemption that has certain income and financial requirements, but may also allow you to keep your home.
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. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Keep in mind that even missing one payment can be enough for your whole case to get dismissed.
You can easily see that there are multiple ways to handle personal bankruptcy. Do not be overwhelmed by the voluminous information available. Take the time you need to think clearly and analyze the information. That way, you’ll make the best decisions.
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