Dealing with bankruptcy is very tough. When you are dealing with financial stress, you come to the realization there aren’t many options. Even with a bad credit score, it is still possible to overcome financial hurdles, as you will see if you keep reading.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. When you are faced with this issue, begin to familiarize yourself with your state’s laws. Bankruptcy laws vary from state to state. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. It is important to be cognizant of the laws in your state before filing for bankruptcy.
Any bankruptcy consultation should be free of charge. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. Only make your decision if all your questions and concerns are adequately addressed. After the consultation, you are not immediately required to come up with a decision. That gives you the chance to speak to a number of lawyers.
Chapter 7
Do some research to find out more about Chapter 13 and Chapter 7. In Chapter 7 most of your outstanding accounts will essentially be erased. Your ties with all creditors will get dissolved. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Before filing a bankruptcy claim, make sure that your home is well protected. Losing your home is thought of as common in bankruptcy cases, but it is by no means inevitable. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. If you’re not sure, however, you can always study the particular homestead exemption regulations. You will learn everything you need to know.
Think about all your options before pulling the trigger. Before filing, talk with an attorney who can help you weigh all of your options. Loan modification plans on home loans are a great example of this. This type of plan allows your lender to work with you eliminating charges, extending your loan, and lowering interest rates to help you pay back the loan without drowning in debt. Creditors would rather be repaid, however slowly, than have you declare bankruptcy.
Do not forget to enjoy life a little once you get through the initial filing process. Filing for personal bankruptcy can be very stressful for the debtor. Make sure you take care of your part and let your attorney do the rest. Your life will most likely improve once you’re over this hump, so relax.
Chapter 7
Before you decide to file for Chapter 7 bankruptcy, you should consider what your bankruptcy might have on others, as your family and friends may be affected. When filing for Chapter 7, you won’t be responsible legally for debt signed by co-debtors and yourself. This does not dissolve any co-signers of the debt, and your creditors will continue to try and collect from them.
Know your rights when filing for bankruptcy. Don’t take a debt collectors word for it simply because they tell you that you can’t have many or all of your debts erased by bankruptcy. You should know that only a few debts cannot be erased, including student loans and child support. If you are unsure about specific types of debt, check the bankruptcy laws in your state or consult an attorney.
Forget about detrimental terms, such as shame, when you are filing for personal bankruptcy. Going through bankruptcy can cause you to lose a lot of self-esteem. But, there is nothing positive about feeling this way and it can actually affect your mental state. If you are filing for bankruptcy and you are thinking negatively about the situation, make an effort to stop that now.
Even if you have filed for bankruptcy you now realize that this does not limit you in life forever. If you are willing to work hard to save money and do not spend frivolously, you can regain your credibility with creditors. So start saving and see how much of a change it makes when people view you the next time you go in for a car or home loan.
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