Nowadays, the economy is not in very good shape. A lot of people with no jobs find themselves in debt. Too much debt leads to bankruptcy, which can be an extremely traumatic experience. When you or a loved one is contemplating bankruptcy, it is important to read the following piece in order to understand available alternatives.
A lot of people find themselves needing to file bankruptcy when they are unable to pay their bills. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. You will find that each state has their own bankruptcy laws. Your house is safe in certain states; however, in other states, it isn’t. It is important to understand the laws in your state before filing for bankruptcy.
The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. It is vital that you disclose all information about your assets and income so there are no delays or penalties, such as a court barring you from filing again later in the future.
Don’t try to hide anything if you are filing for bankruptcy, as this will hurt you in the long run. When you file make sure whoever is handling the process is fully aware of each and every financial detail. Put everything out on the table and craft a wise plan for handling the situation the best you can.
Ask for a free consultation with your bankruptcy attorney and ask questions about experience and education. Most lawyers will meet with you for free and give you helpful advice, so meet with several. Don’t hire an attorney who fails to address all your concerns and questions. Take your time before you decide to file after you meet with your lawyer. You can take your time and check out several attorneys before making your final selection.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. For example, you want to look into credit counseling. This is the best option for small debts. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
Chapter 13
Consider filing for Chapter 13 bankruptcy. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
Always make your loved ones a priority. Bankruptcy can take a toll on you. It can be long and drawn out which adds lots of stress and leaves people feeling empty inside. A lot of people hide away until the entire proceedings have been played out. Do not isolate yourself or you will put yourself at risk for depression. Make it a point to catch yourself if you feel yourself pulling away from others. Tell others that you would like to do some enjoyable things together while you go through bankruptcy process, then do it.
Investigate other alternatives before resorting to bankruptcy. Speak with an attorney who specializes in bankruptcy to find out if alternatives, such as a debt repayment plan or a reduction of your interest rates, might be better for you. If foreclosure looms, think about getting your loan plan modified. There are a lot of ways that your lender can assist you, such as reducing interest rates, eliminating late fees, or extending the term of your loan. After all is said and done, your creditors will still want their money. For this reason, you may wish to investigate debt repayment programs in lieu of bankruptcy programs.
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. Most states allow for the majority of debt to be included on a bankruptcy. If the bill collector is trying to deceive you, then report that company to your local attorney general’s office.
Be certain to be transparent about all of your financial information when the filing of for personal bankruptcy. If the court thinks you are attempting to conceal information, your petition could be denied. Even if it’s a small sum, make sure it is listed. This can include side jobs, any vehicles to be counted as assets, and any loans you may currently have.
Credit Counseling
Before filing personal bankruptcy, consider other options. Think about credit counseling, for example. There are many different non-profit companies that can help you. They can negotiate with each of your creditors to work out payments that you can afford, along with reduced interest rates. The payments you make go to the credit counseling company, and they send that money to your creditors.
Don’t take large cash advances from credit cards prior to filing since the debts will be eliminated from these cards. This is illegal. It’s fraud, and you can still be responsible for paying it back even after declaring bankruptcy.
Even as the economy begins to recover, many people are still in difficult financial straits. Even long-term job loss does not inevitably have to result in bankruptcy. You hopefully have more knowledge now on how you can avoid bankruptcy. Let the force be with you.
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