Coping with the realization that you have to file bankruptcy is not any easy thing to do. If you are thousands of dollars in debt, you may not have many options. Even with a bad credit score, it is still possible to overcome financial hurdles, as you will see if you keep reading.
It is important that you increase your knowledge on personal bankruptcy by reviewing websites that provide reliable information. The United States DOJ, along with a number of other bankruptcy institutes and attorneys specializing in bankruptcy can give you invaluable information. The more information you have, the more confident you can be about any decision you make and you will know that you are doing the best thing possible for your situation.
When bankruptcy seem inevitable it is important not to use your retirement funds or emergency savings to pay creditors. Leave your retirement accounts untouched unless there is absolutely no other alternative. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.
Always be honest when filling out paperwork. Do not try to shield some assets or income from your creditors. This can get you in serious trouble and prevent your bankruptcy petition altogether.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. Although you may find a good lawyer through an advertisement, you can simply find a much better lawyer if the lawyer is recommended to you by someone who has gone through the process and who has the inside track on the lawyer’s true capabilities.
Research what assets are exempt from seizure before you decide to declare bankruptcy. Bankruptcy exemptions are properties may not be seized during bankruptcy. You need to read the exemptions for your state, so you know what property you can protect. If you aren’t aware of this, you could lose some assets that you value.
Always weigh your options carefully prior to deciding to dive head first into filing a bankruptcy claim. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
Chapter 13
Do some research to find out more about Chapter 13 and Chapter 7. Should you choose Chapter 7, your total debt load will be erased. You will no longer be liable for any money that you owe to your creditors. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. You must know about the different bankruptcy types, and how each can affect you.
Many bankruptcy attorneys offer the first consultation with no charge, so consult with several before deciding on one. Make sure that you meet with an actual lawyer and not an assistant or paralegal, as these people are not allowed to provide legal advice. Look for an attorney until you find one you feel comfortable with.
Be sure you know what the difference between Chapter 13 and Chapter 7 bankruptcy is. Get a good grasp of the pluses and minuses each type of filing involves by researching both of them extensively. If you’re really not sure how this all works after your research, meet with your lawyer and ask them prior to making a decision.
Determine if bankruptcy is necessary. Perhaps consolidating your existing debt can make it easier to manage. Filing a claim can take a long time and cause much stress. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. Because of this, you need to think of bankruptcy as a nuclear option; that is, a last resort.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy might be a good option, so don’t overlook it. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. Remember that if you even miss one payment that’s due under this plan, the court could dismiss the whole case.
Even when filing for bankruptcy you should now be aware that this should not put a damper on your life. By demonstrating responsible financial management, (saving money, making payments on time) you can impress creditors and rebuild your credit rating. Begin saving today, and you’ll surely notice the difference in others’ perception of you when you apply for an important loan such as a home or car loan.
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