Simply mentioning the word bankruptcy can cause people to become nervous and worried. It is only natural that people are afraid of skyrocketing debt that causes hardship for themselves and their family members. If this troubles you, or if you are dealing with this nightmare now, the following information is required reading.
When people owe more than what can pay, they have the option of filing for bankruptcy. If you’re in this situation, learn about the laws where you live. Every state is different when it comes to dealing with bankruptcy. Some states may protect you home, and some may not. You should be aware of local bankruptcy laws before filing.
Before undertaking the bankruptcy process, ensure you have made the correct decision. Avail yourself of other options, including consumer credit counseling, if they are appropriate for your situation. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
If a personal recommendation comes your way, this should be a lawyer you focus on. Some companies just want to take advantage of you, so it is important that you have help from someone you trust.
Chapter 7
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Under Chapter 7 type bankruptcy, all debts are forgiven. Your ties with all creditors will get dissolved. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Prior to choosing a bankruptcy attorney, seek a free consultation with at least three attorneys. Make sure that you meet with an actual lawyer and not an assistant or paralegal, as these people are not allowed to provide legal advice. Seeking out different attorneys is all part of the process until you find someone that you can trust.
Safeguard your most valuable asset–your home. It isn’t inevitable that you will lose your house when you file for bankruptcy. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.
Don’t hide from your friends and family while you go through bankruptcy. Going through a bankruptcy is never easy. It’s generally stressful, lengthy and can make people feel guilty, ashamed, and unworthy. Many people decide to hide away from the world until the process is over. This is not a good idea because staying alone could cause serious problems with depression. This is the reason that you need to take the time out to spend time with everyone you love despite what your financial situation is.
Do not file for bankruptcy if your income is greater than your bills. 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.
Debt Repayment
Filing for bankruptcy should not be done on a whim. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. There are many ways in which a lender can make adjustments that will be helpful to you. Among them are extending the loan, forgiving late charges and reducing the interest rate. Creditors want to recoup the most money possible from debtors, and they can often get more through debt repayment plans than bankruptcy procedures.
After you have filed for bankruptcy, enjoy your life. Many debtors stress-out during the time of filing. This stress may lead to something worse like depression, so do what you can to fight that from happening. Your life will most likely improve once you’re over this hump, so relax.
Be sure you’re acting when the time is right. Timing is critical, particularly when it comes to filing for bankruptcy. In some situations it is best to file as soon as possible, but in other situations it is best to wait until after you’ve gotten through the worst of it. Speak with bankruptcy attorneys for a time frame for filing with your situation.
Anyone fearing bankruptcy has a legitimate fear; filing a claim can be scary. Even though you may be afraid, the following article can remove some of the mystery for you. Utilize these tips immediately to improve your financial situation.
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