In the short term, bankruptcy is a negative experience. The embarrassment can be overwhelming when friends discover your poor financial position. Don’t give into it and be sure to use this advice to figure out what you need to know to avoid bankruptcy.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. You have better options. For example, you could try credit counseling. Bankruptcy permanently affects your credit, so avoid filing until you have exhausted all of your other options.
A key tip for those filing a personal bankruptcy petition is to always be completely honest in all documentation. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Credit Cards
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. If this happens, instead you should turn your attention to secured credit cards. This will demonstrate that you’re seriously trying to restore your credit. After a certain time, you will then be able to acquire credit cards that are unsecured.
You must be entirely candid when it comes to declaring assets and obligations in your bankruptcy petition. Penalties may include fines, imprisonment or denial of the filing. Keeping secrets or trying to outsmart everyone is not a wise move.
Find a specialized lawyer if you are thinking about filing for bankruptcy. Filing for bankruptcy is a complicated procedure, and you may not be aware of all the ins and outs. A bankruptcy attorney can help yo,u and make certain you can do things the right way.
Before making your decision to file for bankruptcy, double-check to see if other, less drastic options could make sense. One example would be that a consumer credit program for counseling if you have small debts. Negotiating with creditors is another option, but creditors are notorious for “forgetting” these agreements, so get them in writing!
Do some research to find out more about Chapter 13 and Chapter 7. In Chapter 7 most of your outstanding accounts will essentially be erased. Any ties that you have with creditors will be dissolved. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
Bankruptcy Process
Make time to visit with family and friends during the bankruptcy process. The bankruptcy process can be brutal. Having to declare bankruptcy leaves many people feeling like a failure. Lots of people think they need to hide from everyone until this is all done. However, this isolation will just make you feel worse, and it could cause you to be depressed. Because of this, you need to make sure you spend as much time as you can with your family and friends, even if you are ashamed of your finances.
Think about all your options before pulling the trigger. Speak with an attorney who specializes in bankruptcy to find out if alternatives, such as a debt repayment plan or a reduction of your interest rates, might be better for you. A plan that can be useful when foreclosure is looming is a loan modification. Your creditors will be willing to work with you to allow you to pay off your debts. They may be able to take late fees off of your account, cut down your interest, or even extend the loan’s repayment period. After all is said and done, your creditors will still want their money. For this reason, you may wish to investigate debt repayment programs in lieu of bankruptcy programs.
If you really want to keep your vehicle, speak with your lawyer about possible choices. Lower payments can sometimes be structured into a Chapter 7 solution. In order for this to be considered, your car loan must be one with high interest, you need a solid work history and the car should have been bought 910 days or more prior to you filing.
As you can see, you do not have to resort to bankruptcy. The advice you have read here will show you how you can escape the need to file for bankruptcy. Use the tips and advice you’ve learned here to change your habits and thereby change your financial future for the better.
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