When someone files for bankruptcy, it’s not a good thing. Bankruptcy can be ugly, embarrassing and a tough thing to talk about. Use the article that follows as a way to learn about all of your options.
Ask those you know if they have an attorney to recommend, instead of finding one on the Internet or in the phone book. There are way too many people ready to take advantage of financially-strapped individuals, so you must ascertain that your attorney can be trusted.
Before filing for bankruptcy, hire a qualified attorney. You might not understand all of the various aspects to filing for bankruptcy. Choose an attorney versed in personal bankruptcy to make sure you don’t make mistakes.
Chapter 7
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves the elimination of all of your debt. Any debts that you owe to creditors will be wiped clean. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.
Become knowledgeable in regards to details about chapter seven bankruptcy vs. chapter 13 bankruptcy. Research both types of bankruptcy online, and weigh the positives and negatives each would offer you. Engage your attorney in a conversation about each type, and ask him to answer any questions you may have before deciding which kind is right for you.
Chapter 13
Consider Chapter 13 bankruptcy, if you chose to file. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. The length of the plan is generally up to five years, and when this is over, you will be free of unsecured debt. However, if you miss even one payment, the court will dismiss your entire case.
When you are looking at a Chapter 7 personal bankruptcy, you may well have debts to worry about for which you share responsibility with another person, such as a spouse, family member, or business partner. Speak to an attorney or read the bankruptcy laws in your state to find out if certain loans can be excluded from your filing. Creditors, however, will hold the co-signer liable for the entire balance of the debt.
If you decide to file for bankruptcy, it’s important that you’re educated about your rights. There are unscrupulous debt collectors who may suggest that your obligations cannot be included in a bankruptcy. There are very few debts, such as child support or student loan debt, that can’t be bankrupted. If a collector tells you your debt won’t be discharged in your bankruptcy and you know that it will, report the collector to the attorney general’s office in your state.
Act at the right time. When it comes to filing for personal bankruptcy, timing is vital. Sometimes, you may need to file quickly; however, at other times, you should wait until the worst is over. Consult with an attorney who specializes in bankruptcy so you know when it is a good time to file.
Don’t let shame consume you during the bankruptcy process. Going through bankruptcy can cause you to lose a lot of self-esteem. Although dealing with a bankruptcy is stressful, try to focus on the positive. Keeping an optimistic view as you deal with your financial woes is the most productive way of dealing with a bankruptcy.
If you plan on filing bankruptcy, never wait too long. Some people just ignore the trouble they are in financially and think it will go away later. This is not a good decision. Debt could become uncontrollable and by not dealing with them properly, your wages could be garnished or you may find your home in foreclosure. You should call a good bankruptcy lawyer and ask for advice as soon as you find your debts have become completely unmanageable.
Be certain you are totally aware of the laws of bankruptcy before you file. For example, it is forbidden for an individual to transfer any assets away from the name of the filer within the twelve months preceding filing. Also, it is illegal to load up your credit cards with debt right before filing occurs.
Whenever you file a petition for bankruptcy, do not leave out any information about your finances or assets. Overlooking any information can result in a delayed or rejected petition. No matter how insignificant a sum seems, include it in the documentation. Don’t forget about side jobs, loans you’ve taken out or vehicles that might count as assets.
Do not get sizable cash advances from credit cards before filing for bankruptcy because you think the debt from the cards will be erased., Not only is this fraud, but you could end up having to pay back the money, even once you have filed for bankruptcy.
Don’t wait until after filing for bankruptcy to become more responsible with your finances. Don’t use credit cards to acquire more dent right before filing. When looking at your situation, a judge will take both your past and current credit history into consideration. Your current spending behavior should show that you are making a real effort to modify your financial habits.
Clearly, bankruptcy does not need to be inevitable. By following the tips presented here, you can avoid filing for personal bankruptcy. Start using what you learned today and see how much of a change you can make in your life, so that you do not have to harm your credit history.
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