Is Bankruptcy The Best Option For You?

The national economy remains in poor condition. With a recession comes an inevitable increase in unemployment and personal debt levels. High debt often leads to the miserable state of bankruptcy. If you or a loved one is considering bankruptcy, find out what to do about this situation by reading this article.

A lot of people find themselves needing to file bankruptcy when they are unable to pay their bills. If you’re in this position, it is a good thing to familiarize yourself with the laws that apply in your area. Each state has their own bankruptcy laws. Some states protect your home, and others do not. It is best to become familiar with your state’s laws regarding bankruptcy before you take the steps to file.

Before making the decision to file for bankruptcy, be sure to do some research and learn all you can about the subject. There are many websites available that offer this information. The United States Justice Department, the ABI (American Bankruptcy Institute), as well as the NABCA (National Assoc. Consumer Bankruptcy Attorneys) are excellent sources of information. The more you know, the more you’ll knwo that you’ve made a wise decision and the you’re making sure your bankruptcy goes as smooth as possible.

When it gets time to think about bankruptcy, avoid using your retirement or savings to pay off the creditors or even make attempts to settle the debt. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.

Always be honest with the information you give about your finances. Not hiding any assets or income is essential for avoiding possible penalties and your ability to re-file at some point in the future.

Do not hesitate to remind your lawyer of any details regarding your case. Chances are that you may have forgotten to tell them about certain specifics that may be important to your filing. This is your bankruptcy and your future, so never be nervous about speaking your mind.

The best way to build your credit up after a bankruptcy is making all your payments on time. A great way to rebuild your credit is to apply for a prepaid credit card. This will allow you to start building a good credit history while minimizing the bank’s risk. Eventually, you could be able to obtain unsecured credit.

Instead of relying on random selections from the phone book or Internet, ask around and get personal recommendations. Some companies just want to take advantage of you, so it is important that you have help from someone you trust.

Familiarize yourself with any new law before you make the final step to filing for bankruptcy. Bankruptcy laws are always changing, and you need to be aware of any changes so your bankruptcy can be properly filed. Your state’s legislative offices or website will have up-to-date information about these changes.

It is important to understand clearly the benefits of a Chapter 7 or 13 bankruptcy. Research both types of bankruptcy online, and weigh the positives and negatives each would offer you. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.

Be sure that bankruptcy really is your best option. You may be able to manager gets more easily by consolidating them. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. It will affect your access to credit in the future. Needless to say, if some alternative strategy will allow you to take care of your debts, you should give it a try before resorting to bankruptcy.

Unsecured Debt

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. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.

Spend time with friends and family to keep your stress levels to a minimum through the bankruptcy filing process. Bankruptcy proceedings can be extremely harsh. It is long, full of stress and leaves individuals having feelings of shame and guilt. Many people tend to hide until their process is completed. Pulling away from people who care for you will not help the situation, and can cause your negative feelings to intensify. Time spent with people who care about you can give you new perspective on your financial situation.

Filing for bankruptcy should not be done on a whim. A lawyer that specializes in bankruptcy law can help advise you of other options, such as repayment plans and reducing interest rates to relieve some of the burden. Loan modification plans can help if you are dealing with foreclosure. The lender is able to help you in a number of ways, such as reducing interest rates, eliminating late charges, and even lengthening the loan, giving you more time to pay. 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.

Make sure the time is right when you file a bankruptcy claim. Timing is everything, especially in personal bankruptcy filings. Sometimes, you may need to file quickly; however, at other times, you should wait until the worst is over. Speak to a bankruptcy lawyer to determine what the ideal timing is for your personal situation.

While the economy is beginning to gather steam, a number of people still do not have jobs or acceptable compensation. Just keep in mind that there are resources available to help you to avoid using bankruptcy, even if you do not have steady income. You hopefully have more knowledge now on how you can avoid bankruptcy. Take this information and apply it to your personal financial situation.