These days, the process of bankruptcy is an all to common occurrence. If you are considering bankruptcy, you are not alone. Prior to making the decision to file a petition, you need to have a thorough understanding of the topic so that you act in your own best interest. The following tips are going to help clarify some bankruptcy confusion for you.
Think through your decision to file for bankruptcy carefully before going ahead with it. Consider any other options that are available to you, such as consumer credit counseling. Bankruptcy is a permanent part of your credit, so before you make such a big decision, you might want to explore all other choices so that your credit history is affected as minimally as possible.
If you are going through a bankruptcy do not fall victim to guilt and pay off debts that you do not need to pay. You should never touch your retirement accounts, unless you have absolutely no choice. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
Don’t be reluctant to remind your lawyer about specific details he may not remember. Just because you have told him something of importance that he will remember it. This is your bankruptcy case, so do not be afraid to remind your lawyer of any key facts.
Secured Card
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. This will show people that you are serious about getting your credit record back in order. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Seek free consultations from a handful of lawyers, before deciding which one to hire. Make your decision after all of your questions have been answered. There is no need to feel rushed to decide to file after you talk with your bankruptcy lawyer. You can take as much time as you need to meet with different lawyers.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. If your debt is relatively low, you may be able to manage it with credit counseling. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Chapter 7
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Chapter 7 involves the elimination of all of your debt. This includes creditors and your relationship with them will become no longer existent. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
Take steps to ensure your home is protected. Filing for bankruptcy doesn’t automatically involve losing 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. If you’re not sure, however, you can always study the particular homestead exemption regulations. You will learn everything you need to know.
Know and understand the difference between filing for Chapter 7 bankruptcy versus Chapter 13 bankruptcy. Be sure you go on the Internet and do your research to see what’s best for you. Do not hesitate to have your lawyer explain any details that seem difficult to grasp. This will help ensure you make the right choice when filing.
Determine if bankruptcy is necessary. It might be possible to consolidate some of your debt instead. Filling for bankruptcy is a lengthy, stressful process. It will also harm your ability to secure credit in years to come. Because of this, you should be sure that bankruptcy is your only option before you file.
Chapter 7 Bankruptcy
If you are moving forward with a Chapter 7 bankruptcy, you need to learn how that can negatively affect anyone who shares loans with you. A Chapter 7 bankruptcy will relieve you of your legal responsibility to pay any joint debts. Although, your creditors may insist that the co-debtor pay off the entire debt.
During a Chapter 13 bankruptcy, you may still be able to get a mortgage or car loan. There are extra hoops to jump through. Your bankruptcy custodian will need to approve the loan. Create a budget and prove that you will be able to afford it. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
Bankruptcy is a difficult and stressful process, and you will need all the help you can get. Engage a competent lawyer in order to avoid excess stress and keep everything on track. When choosing an attorney, cost isn’t the only thing to look at. Think about quality rather than cost when hiring an attorney. Do not choose an attorney until you have interviewed them, checked with the better business bureau and checked their standing with the bar association. You can attend court hearings if you want to see a prospective attorney in action.
As this article stated, the subject of bankruptcy is on many people’s minds nowadays, due to the economy. In order to make sure you make the best decisions when it comes to the topic of bankruptcy, be sure to use the advice that this article has given you.
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