Anything leading you to going through bankruptcy is not a happy tale, but the life you live after might be. You are being given the opportunity to start again with a debt-free slate. The following article will give you advice to help make process of filing go smoothly.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Leave your retirement accounts untouched unless there is absolutely no other alternative. Although you may need to tap into your savings, you should not use up all of it right now and jeopardize the financial security of your future.
If possible obtain a personal recommendation for a bankruptcy lawyer instead of randomly choosing one. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
Take advantage of the opportunity to consult with a number of bankruptcy lawyers who offer the first visit at no charge. Meet with the actual lawyer, not a paralegal or assistant, as they’re not allowed to give out legal advice. It will be important to work with a bankruptcy lawyer that you feel comfortable with; a little comparison shopping will help you find the right one.
Don’t file for bankruptcy if it is not completely necessary. Perhaps consolidating your existing debt can make it easier to manage. It can be quite stressful to undergo the lengthy process of filing for personal bankruptcy. You should be aware that there are some negative ramifications to it, like extreme damage to your credit score. Because of this, you should be sure that bankruptcy is your only option before you file.
Chapter 7
Keep in mind that filing for Chapter 7 bankruptcy may affect other people than just you, including family members, and in some cases, business associates. When filing Chapter 7, you are not legally responsible for the debts in your name. Sadly, this will not be the case for your co debtor. Your creditors may simply turn their attention to your hapless acquaintance.
If you filed for Chapter 13 bankruptcy, you can still get a mortgage or a car loan. This is a lot harder. You will need to go through various hoops in order to be approved for any new loan type. When meeting with the trustee, bring a budget which shows that you will be able to afford the payment on the loan you are trying to get. You will also need to explain why it is necessary for you to take out the loan.
Make sure you are acting at the appropriate time. Filling for bankruptcy can be a matter of correctly assessing the right time to begin. 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. Consult with an attorney who specializes in bankruptcy so you know when it is a good time to file.
Before you decide to file, make yourself aware of the laws about bankruptcy. There are often laws prohibiting the transfer of money from the filer for a certain period preceding the bankruptcy filing. Additionally, it is against the law for any filer to boost up the debt amount they carry on any credit cards just before filing.
If you plan to pay debts off before you file for bankruptcy, be careful. Bankruptcy rules generally outlaw repayment of creditors in the 90 days leading up to a bankruptcy filing, a period that is extended to one year when it comes to payments made to family members. So, before you ultimately decide to file a claim, be sure that you understand the rules in place.
As previously stated, the reasons for filing for bankruptcy are not generally a happy fairy tale. That said, filing for bankruptcy can be a positive turning point in your life. If you put the ideas you learned in this article into practice, you can write a whole new financial story and live happily ever after.
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