Everyone is suffering from the bad economy. A poor economy means more people than ever have debt and are losing their jobs. Because more people are falling into debt, more people are filing for bankruptcy. When you or a loved one is contemplating bankruptcy, it is important to read the following piece in order to understand available alternatives.
Never lie about anything in your bankruptcy petition. You must avoid the temptation to conceal any valuables, money or other assets from the courts. If they find that you have lied, you may be faced with fines, penalties or the inability to file in the future.
Instead of getting your lawyer from the yellow pages or on the Internet, try your hardest to find one with a personal recommendation. There are lots of unsavory companies and lawyers out there who prey on people who are in desperate straits. It is up to you to find someone that is trustworthy and can make the process go smoothly.
Weigh all of your options before declaring bankruptcy. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. 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 that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves the elimination of all of your debt. All happenings with creditors will disappear. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. Take the time to learn more about these different options so you can make the best decision possible.
Act at the right time. When it comes to filing for personal bankruptcy, timing is everything. Sometimes you should file immediately; however, there are times when it is better to delay until the worst has passed. Speak to a bankruptcy lawyer to determine what the ideal timing is for your personal situation.
Before filing for bankruptcy, establish the fact firmly in your mind that you have nothing to be ashamed of. For many people, bankruptcy is a source of guilt and feelings of worthlessness. Continuing to let yourself feel that way can damage your emotional health and does not benefit you in your endeavors to deal with your financial situation. These difficult financial times can easily take their toll on anyone. One of the best ways to cope with the situation is to maintain a positive attitude.
Know the bankruptcy code backwards and forwards before filing. You should not transfer your assets to anyone in the year preceding your bankruptcy filing. Also, it is illegal to load up your credit cards with debt right before filing occurs.
If you plan to pay debts off before you file for bankruptcy, be careful. The laws regarding bankruptcy most often prevent you from paying back some creditors for up to 90 days before filing, and friends and family for up to one year. Read up on the rules before you make any decisions about your finances.
You will find many people, who have filed for bankruptcy, completely separate themselves from ever using credit again if possible. That is not a great idea, because using credit builds better credit. In the future, you will almost certainly need credit to make major purchases, such as a house or a car, and your credit score will be dreadful if you haven’t used credit since your bankruptcy. Start by using just one credit card, and propel your credit in a positive direction.
Remember that just because you have filed for personal bankruptcy it will not cause you to lose everything you own. When you file for bankruptcy, you are allowed to keep personal property. Items such as family mementos, home decor, furniture, personal jewelry, clothes and more fall under private property. This will all depend on the type of bankruptcy you choose, your finances, and your state’s laws, but you could hold onto your large assets like the car and the family home.
Take the time to make a complete list of your debts. Your debts in particular will serve as the basis of your claim. Every single debt you have will need to be listed here. Remember to go through all of your records and try to determine the exact amount. Take your time with the process of filing for personal bankruptcy. It is important that all of the numbers and debts included in your case be included accurately.
If you think bankruptcy is an option, you will need to hire a bankruptcy attorney. An attorney can assist you both in ascertaining if bankruptcy is what you need and dealing with the court appearance. Your attorney may also help you with any questions you may have, as well as assist you in completing the paperwork you need to complete.
Avoid Bankruptcy
The economy is not in great shape right now, and although things are slowly getting better, there are still large numbers of people out of work and in debt. Even without steady income, there are things you can do to avoid bankruptcy. Now you know all the options available to avoid bankruptcy, if at all possible. No matter how bad things seem, there is hope for you, good luck.
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