There are few financial decisions more momentous than determining whether or not it is time for a bankruptcy filing. Therefore, it is very important to understand what you are doing when you file for bankruptcy. Use the tips written in this guide to help you go in the proper direction. Proper research can assist you with any choices you have to make.
Ask yourself if filing for bankruptcy is the right thing to do. You have better options. For example, you could try credit counseling. Since your credit history will forever note the bankruptcy, you want to make sure that you have tried everything else before you take an action such as this, in order to minimize the effect it will have with regard to your credit history.
If you are meeting with a lawyer to discuss bankruptcy, the initial consultation should be free so ask every question you have. Most lawyers offer free consultations, so talk to a few before making your decision. Decide which lawyer you like best buy reviewing all of the lawyers’ answers to your questions. Choose the lawyer who addressed your issues the best. You do not need to make a decision immediately after the consult. That gives you the chance to speak to a number of lawyers.
Remember to only file for bankruptcy if you need to. You may find consolidating your debt may be simpler. The bankruptcy process takes forever to finish and is very nerve-wracking. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. Therefore, you must make sure that there is no other option that you could take before you file for bankruptcy.
Chapter 13
Consider Chapter 13 bankruptcy. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. This allows you to keep possession of your real estate and property and repay your debt through a debt plan. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Missing a payment under these plans can result in total dismissal by the courts.
Before proceeding with your bankruptcy, it’s a good idea to start spending ample time with the people you care about most. The process of bankruptcy can seem brutal. It is long, stressful and makes people feel like losers. Lots of people think they need to hide from everyone until this is all done. You shouldn’t do this, though, as staying away from the world can amplify any emotional issue you are having, and they could even morph into full-blown clinical depression. So, even though you may be ashamed of the situation you are in, you should still be around those you love.
Although the entire process can be stressful, do not allow the stress to take over. It can be several months between the initial filing and the final discharge of debts. Depression can ensue from the stress if action isn’t taken. Once the process is complete your life will improve.
Remember that filing for Chapter 7 personal bankruptcy will not just affect you. Think about the effect it will have on business associates, friends and family or anyone else who may be a co-signer with you. When you file a Chapter 7, your debts will be dissolved. Your creditors can then come after your co-debtor for full repayment of the debt.
When filing for personal bankruptcy you should always be aware of your rights. There are unscrupulous debt collectors who may suggest that your obligations cannot be included in a bankruptcy. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If you are told by a debt collector that your debts are not dischargeable, make a record of your conversation and report the individual to the proper state authorities.
Bankruptcy can get a bit tricky at times, but as long as you’re using what you learned here, the process should be a lot easier. Don’t let all the information and regulations surrounding bankruptcy overwhelm you. Think about the tips included above. You’ll be able to make more considered decisions this way.
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