It can be challenging to face the prospect of bankruptcy. You realize how limited you are when it comes to a tight financial situation. Despite a bankruptcy on your record and a dinged credit score, you can often still get loans if you need them.
Generally bankruptcy is filed when a person is facing insurmountable debt. If you are in this position, you need to be familiar with the laws in your area. Bankruptcy rules vary by jurisdiction. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. It is important to be cognizant of the laws in your state before filing for bankruptcy.
Think through your decision to file for bankruptcy carefully before going ahead with it. Alternatives do exist, including consumer credit counseling. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
A key tip for those filing a personal bankruptcy petition is to always be completely honest in all documentation. Not only is hiding income and assets wrong, it is also a crime.
When a bankruptcy is imminent, retain a lawyer immediately. Filing for bankruptcy is a complicated procedure, and you may not be aware of all the ins and outs. A qualified bankruptcy attorney will guide you through the steps and help you do everything properly.
It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. Be certain that the person you meet with is really a lawyer. Avoid meeting with paralegals or legal assistants because they cannot give you legal advice. By meeting with several attorneys through a free consultation you will be able to choose which attorney you feel more comfortable with.
Your most important concern is to protect your home. Just because you’re going bankrupt doesn’t mean that you also have to be homeless! If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
Chapter 13
Look into filing Chapter 13 bankruptcy. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. Typically, any plan you develop will last around 3-5 years. Afterwards, any remaining unsecured debts will be discharged. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Banish the word “shame” from your vocabulary before you file for bankruptcy. It is not uncommon for bankruptcies to elicit feelings of guilt, remorse and embarrassment. But, such emotions get you nowhere, and they can cause significant mental issues to emerge. Keeping an optimistic view as you deal with your financial woes is the most productive way of dealing with a bankruptcy.
Review bankruptcy rules before you file your petition. There are many pitfalls when it comes to the code pertaining to personal bankruptcy that can lead to a lot of unwanted issues. Making mistakes can have an effect on the outcome of your case. Before continuing, research personal bankruptcy. This will make things much easier.
Watch how debts are paid off prior to filing. The laws surrounding bankruptcy often prohibit paying back certain creditors up to ninety days prior to filing, and family members up to a year! Before making important decisions in regards to your finances, be sure you understand the laws.
You should acquire a bankruptcy lawyer when filing for bankruptcy. A qualified attorney can advise you on the necessity of filing, represent you in court and simplify a complex process. Attorneys can prepare your documents and help you with any concerns you may have.
Carefully pick the lawyer you will use when filing for bankruptcy. Bankruptcy law seems to be a haven for new, inexperienced attorneys. It is important that the attorney you pick is experienced and has the proper licenses. Internet research is a great tool for investigating a potential lawyer. You will also find information from clients who have dealt with them.
Rethink a divorce when in a tough spot with finances. Many people who divorce must immediately file bankruptcy because of unforeseen financial difficulties. Reconsidering divorce is usually the best option in any case.
Chapter 7
If, after you file a Chapter 7 petition, you learn that the homestead exemption does not apply, it might be possible to convert your case to a Chapter 13. Your attorney should be able to tell you whether it is advantageous for you to convert your Chapter 7 filing into a Chapter 13.
If a mistake causes your case to be dismissed, you may re-file. But, be aware that you’ll only have 30 days to re-file after your case has been dismissed. It is possible to get the stay extended, if there is a good reason for the error and refiling.
Don’t delay a personal bankruptcy filing if it’s unavoidable. If this is the only option that you could take, waiting won’t make it better. You will only fall further and further behind the financial eight ball if you continue to delay. Stress has an adverse affect on your health and negatively impacts your life. The sooner you file, the sooner you can begin to rebuild.
In time you will leave the effects of bankruptcy behind you and resume your normal life. If you are willing to work hard to save money and do not spend frivolously, you can regain your credibility with creditors. So begin saving your money and you will realize how much difference it makes when shopping for a home loan or car.
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