How To Decide When To File Personal Bankrupcy

Those dealing with personal bankruptcy filing are known to experience feelings of embarrassment, irritation and shame. Many live with the constant fear of being unable to repay their debts while also maintaining a decent standard of living. However, bankruptcy isn’t a process that will forever hurt your future.

When people owe more than what can pay, they have the option of filing for bankruptcy. Study the laws in you state to learn what you need to do and what your options are. Each state has their own bankruptcy laws. For instance, some states protect you from losing your home in a bankruptcy, but others do not. Become acquainted with local bankruptcy laws before filing.

Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. If the tax has the ability to be eliminated, the debt can be too. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.

If you are planning to file for bankruptcy, be sure to learn what types of assets you will be able to keep and which can be seized. Check the bankruptcy laws in your state to find out if certain items are excluded from your bankruptcy filing. Make sure that you review this list before you decide to file, to see if you can hang on to your most important possessions. If you fail to do so, things could get ugly.

Be honest when filing for bankruptcy, because hiding liabilities or assets can only cause trouble to you. Good or bad, you must tell your bankruptcy attorney everything about your financial situation. Do not hold anything in secret and create a strategy on how you will deal with the things you are facing.

Chapter 13

Consider filing for Chapter 13 bankruptcy. If you owe an amount under $250,000 and have a consistent income source, Chapter 13 may be right for you. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. This repayment period usually lasts from three to five years. If you make your payments faithfully during that time, any remaining unsecured debt will be eliminated. Missing a payment under these plans can result in total dismissal by the courts.

Always make your loved ones a priority. Going through a bankruptcy is never easy. This long and stressful process can leave a person feeling guilt ridden, unworthy and ashamed. Many people don’t feel like socializing during the ordeal. But, isolating yourself from others could bring out more depression. Remember that it is not your families fault for your financial hardships and use this time to pull together and be strong.

If your income exceeds your obligations, you should not seek bankruptcy protection. Bankruptcy might seem like a good way to get out of paying your bills, but it will devastate your credit for the next ten years.

Don’t forget to enjoy your life once your finances get fixed. So many people become stressed when they file. That stress can cause depression, if you don’t take care to avoid it. You must realize that things will get better over time.

Don’t just assume bankruptcy is the right option, especially if you have not considered others. Perhaps credit counseling can resolve your issues. May non-profit companies are available to help you. They will negotiate with your creditors in order to reduce your payments and interest rates. You make payments to them and they pay your creditors.

One thing to consider is that filing bankruptcy might be a better alternative to making late payments or missing payments completely. Bankruptcy can be seen on your credit history for 10 years, but you can begin repairing the damage immediately. Bankruptcy can give you the fresh start you need.

If you find it necessary to file bankruptcy, hire a bankruptcy attorney. An attorney can offer valuable advice and help to simplify an extremely complex process. They can also help to unravel the complexities of the paperwork and give you any further information you need.

A few months after bankruptcy is complete, get your credit report copies from the 3 credit reporting agencies. You want to see an accurate record of the closure of your accounts and the discharge of your debts. If you see any mistakes, look into them immediately.

Now that you know a little more about bankruptcy, this process should be much easier for you. Although you may feel bothered at first, you will see that you can overcome the effects of bankruptcy. Stick with the information presented here and over time you will be able to slowly crawl out from under the mountain of debt you have accumulated.

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