Being faced with the decision to file for bankruptcy can put you under a lot of stress. When you’re in a bind, financially, you may find that you have limited options. Your future lending requirements will not be permanently hindered by bankruptcy, read on to find out why.
People generally mostly feel the need to get a bankruptcy filed for when they have more money owed than they can get. If you are in this position, you need to be familiar with the laws in your area. Most states differ in their laws governing bankruptcy. In some areas, your residence may be completely exempt, but in others, it will not be. Be sure you educate yourself on local laws prior to filing.
Credit Card
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. If the tax can be discharged, so can the debt. This means using a credit card is not necessary, when it will just be discharged.
When you feel certain that you must file for personal bankruptcy, refrain from squandering your life savings to pay off unsecured debt. Don’t touch retirement accounts unless you don’t have a choice. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
Do not be afraid to remind your attorney of important specifics of your case. Chances are that you may have forgotten to tell them about certain specifics that may be important to your filing. Your case and future are affected by the attorney’s action, so never be afraid to communicate.
Determine which of assets are safe from seizure and which are not before filing for personal bankruptcy. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. Many belongings may become eligible for repossession or seizure after filing for bankruptcy. If you neglect this important step, you might be blindsided when a possession that is important to you is taken to repay creditors.
You must be entirely candid when it comes to declaring assets and obligations in your bankruptcy petition. Whoever provides your legal consultation must be privy to all of your financial information. Don’t withhold information, and create a smart way of coping with the reality of the situation.
Take the time to find a simpler solution to your financial issues, before filing for bankruptcy. For example, consumer credit counseling programs can help if your debt isn’t too large. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Chapter 7
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. All of your financial ties to the people you owe money to will disappear. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. When choosing the type of personal bankruptcy that is correct for you, it is very important that you know the differences.
Look into all of your options before you choose to file for bankruptcy. Talk with a bankruptcy lawyer and ask about alternatives, such as debt consolidation or negotiating with creditors. You can apply for a modification of your mortgage if your home is going into foreclosure. Some lenders will make concessions rather than losing the money owed to bankruptcy. These concessions include waiving late fees, lowering interest rates, and changing the loan term. Creditors want their money. Often, they are willing to work out repayment plans with you in order to get it.
Pick the right time to file. Timing is important, and that is especially true when filing for bankruptcy. There are times when you should file as soon as you can, but in some other situations it may be best to wait for the worst to be over. Speak with a bankruptcy lawyer about when the best time is to file for your specific needs.
If you are forced to file for bankruptcy, you should avoid being ashamed of yourself. The bankruptcy process can make many people feel ashamed, guilty and unworthy. However, having this feeling about yourself isn’t going to help anybody, and your health could even be compromised. Keep a positive state of mind to deal with your tough financial situation.
Even when filing for bankruptcy you should now be aware that this should not put a damper on your life. By becoming more of a financially responsible individual, creditors will get the picture that you’re trying to dig yourself out of a hole. So implement a savings program, and watch how much it helps you when you need to apply for a home or car loan.
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