Current economic conditions are tough for many people. With a recession comes an inevitable increase in unemployment and personal debt levels. Rising personal debt leads, in many cases, to increased bankruptcy filings. If you or someone you know is in jeopardy of going bankrupt, then read this article to figure out how to get out of this situation.
When people owe more than what can pay, they have the option of filing for bankruptcy. If you find yourself going through this, you should know all about the laws that are in your state. Bankruptcy rules vary by jurisdiction. In some states, your home is protected, while in others it is not. Do not file before learning about the bankruptcy laws in your state.
Ask yourself if filing for bankruptcy is truly your best option. You have other options, including consumer credit counseling help. If you file for bankruptcy, a mark is permanently left on your credit. Therefore, before you do this, you should utilize all the other options that you have.
Don’t be afraid to remind your attorney of certain details in your case. You should not take for granted that your lawyer will remember every important detail that you have have told him earlier without a reminder. Don’t fear speaking up since it affects your case and future.
Unsecured Credit
It’s not uncommon to learn soon after bankruptcy that you are unable to get an unsecured credit card easily. Look into getting a secured credit card in order to get back on your feet with building credit. This will allow you to start building a good credit history while minimizing the bank’s risk. After a while, you may be able to get unsecured credit again.
If you know people who have filed for bankruptcy, ask them who they would recommend rather than relying on Internet reviews or worse, just randomly picking someone out of the phone book. To handle your bankruptcy, you need a trusted attorney, not a shady one that is out to take your money.
Investigate other alternatives before resorting to bankruptcy. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. A plan that can be useful when foreclosure is looming is a loan modification. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. Above all else, what creditors want is to get their money. Sometimes they would rather settle for a repayment plan instead of a debtor who is bankrupt.
If keeping your vehicle is of great concern, ask your lawyer if you can secure a payment modification. In many cases, you can reduce your payment by filing a Chapter 7 petition. The vehicle must have been obtained more than 90 days before filing and be a loan with high interest. You must also have consistent work history.
Act at the right time. Proper timing is important, especially when it comes to personal bankruptcy. Sometimes you may want to wait to file and in other situations you may find it better to do it as soon as you can. Find out when the correct time is for you to file for bankruptcy from a bankruptcy legal professional.
Avoid using bankruptcy as a last resort. The judge reviewing your petition will consider your recent behavior, purchases, income and payments when making a decision. Personal debts can spiral out of control very quickly, and if you don’t take care of them, you may find yourself facing foreclosure or wage garnishment. As soon as you stop denying that your debt is unmanageable, seek the advice of a good bankruptcy attorney.
Before you decide to file, make yourself aware of the laws about bankruptcy. For example, it is against the law to transfer any assets from the filer to another for a year before filing. Also, it is against the law for a person to acquire more debt on their credit card prior to filing.
Avoid Bankruptcy
Even though there are rumors that the economy is improving, lots of people are jobless or under employed. Even when your financial situation is not producing enough income, there are some things one can do in order to avoid bankruptcy. Now you know all the options available to avoid bankruptcy, if at all possible. Good luck to you.
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