Although unhappy circumstances in your life might have led you to file for bankruptcy, your life post-bankruptcy can be much better. With a clean slate, it is possible to start over both financially and personally. Read this article to find out how to use bankruptcy for a chance at financial rebirth.
Millions of Americans file for bankruptcy each year because they can not pay their bills. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. Every state is different when it comes to dealing with bankruptcy. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. Familiarize yourself with the bankruptcy laws of your state prior to filing.
Do not use your retirement fund or savings to pay off creditors. Leave your retirement accounts untouched unless there is absolutely no other alternative. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
Try to get a bankruptcy lawyer that your friends recommend, as opposed to someone that you find from the Internet or yellow pages. There are various companies that prey on the financially desperate, so you need to find someone you can trust to ensure the process goes smoothly,
Prior to filing your bankruptcy petition, go over the list of assets that cannot be seized by creditors. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. Make sure that you carefully look over this list prior to filing to discover if your valuable assets will be seized. If you don’t read it, you could have nasty surprises pop up later due to your prized possessions being seized.
Take steps to ensure your home is protected. Filing for bankruptcy does not mean you have to lose 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. You could also check out the homestead exemption. This lets you continue living in your house, depending on whether you meet certain financial requirements.
Ensure that you bankruptcy is your best choice. You may find consolidating your debt may be simpler. Filing a claim can take a long time and cause much stress. It will certainly affect the credit rating that you have in the future. This is why you must make sure bankruptcy is your last resort.
Do not forget to be around those you love. Bankruptcy proceedings can be extremely harsh. It is extremely stressful and long, and it can leave you feeling ashamed of yourself. A lot of people become depressed and withdrawn until their bankruptcy is discharged. However, becoming a hermit will only increase feelings of self-doubt and could make you depressed. Because of this, you need to make sure you spend as much time as you can with your family and friends, even if you are ashamed of your finances.
Investigate other alternatives before resorting to bankruptcy. You can get your interest rates reduced or enter into a debt repayment plan. Before you file bankruptcy, ask your attorney if any of these are viable alternatives for you. If you are looking at foreclosure, think about a loan modification program. Your lender can adjust your loan in many ways including extending the time you have to pay, reducing your interest rate, or canceling some of your late fees. When push comes to shove, creditors want their money, and they are willing to make concessions to get it and prevent the debtor from declaring bankruptcy.
Rest assured, when you file for Chapter 13 bankruptcy, you still have the ability to take out mortgage and car loans. It is a little more difficult, though. Your trustee must approve any new loans. You need to show them why and how you can handle paying back the new loan. You will need to be able to explain why the purchase is necessary.
When filing for personal bankruptcy you should always be aware of your rights. There are unscrupulous debt collectors who may suggest that your obligations cannot be included in a bankruptcy. There are not many debts that can not be bankrupted, student loans and child support for example. 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.
As previously stated, the reasons for filing for bankruptcy are not generally a happy fairy tale. But, just because you ended up in this dark place does not mean that the sun cannot shine once more. Actually, by using the advice you’ve learned here, your story of hardship could have a happy ending after all!
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