When filing for bankruptcy, it is best not take the process lightly! You need to be as well-informed as possible when you make bankruptcy decisions. Make sure to use what you learned from this article to make the right decisions. Just make sure you do enough research so that you are more prepared for any future obstacles.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Leave your retirement accounts untouched unless there is absolutely no other alternative. You may need to use some of your savings; however, you should not use all of your savings. Remember that you must safeguard your future financial security.
Chapter 7
Know the differences between Chapter 7 and Chapter 13 bankruptcy. In Chapter 7 most of your outstanding accounts will essentially be erased. All the things that tie you to creditors will go away. Bankruptcy under the rules of Chapter 13, on the other hand, require you to work out a payment arrangement to pay back the agreed upon amounts. You must know about the different bankruptcy types, and how each can affect you.
Don’t file for bankruptcy if it is not completely necessary. You may be able to manager gets more easily by consolidating them. The whole process of filing for bankruptcy can be a long, and hard one. Your credit will be impacted for many years. Therefore, you need to be sure that you really have no other option than to file for bankruptcy.
Consider if Chapter 13 bankruptcy is an option. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. The length of the plan is generally up to five years, and when this is over, you will be free of unsecured debt. However, if you miss even one payment, the court will dismiss your entire case.
Do not let bankruptcy consume you, make sure you make time for your friends and family. Going through bankruptcy is difficult. It can take a long time, take a great emotional toll and cause people to feel embarrassed and defeated. Many people decide to hide away from the world until the process is over. On the other hand, isolation of a self-imposed nature can only worsen your feelings, opening the door to mental depression to join your financial depression. 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.
Do not file for bankruptcy if your income is greater than your bills. Although you may see bankruptcy as a free pass to eliminate your debt, if you can slowly whittle away at your debt with your income, it will be much better than killing your credit score with a bankruptcy filing.
Speak with an attorney about any fears you have about losing your car. You may even be able to get your monthly payment reduced. Most of the time Chapter 7 bankruptcy will allow your payments to be lowered. In order for this to be considered, your car loan must be one with high interest, you need a solid work history and the car should have been bought 910 days or more prior to you filing.
Chapter 7
Before filing for bankruptcy under Chapter 7, make sure that you consider the implications this will have on any of your co-debtor, who are usually family members, close friends or business associates. When filing Chapter 7, you are not longer liable for the debts that you and a co-debtor signed for. Although, your creditors may insist that the co-debtor pay off the entire debt.
Bankruptcy laws are very exact and very important, so ensure that you’re well aware of all current laws before you file a petition. For instance, you need to know not to shift assets into someone else’s name in the year leading up to your filing. Maxing out your credit cards immediately before filing is also illegal.
Create a list of all of your finances before filing for bankruptcy. Overlooking any information can result in a delayed or rejected petition. It is better to have something on there that you are unsure about, rather than not include it at all and risk a dismissal. That may include secondary jobs, any cars or trucks you want to be considered assets and any current loans.
As you’ve seen from this article, there is more than one way to go about filing for personal bankruptcy. Don’t stress about the amount of information before you. Sit back and soak in all that you read here. That way, you stand a better chance of making a wise decision.
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