Declaring bankruptcy is a negative process. Many people feel embarrassed or ashamed if they have to tell other people that they are bankrupt. Using the tips in this article, you can learn how to avoid bankruptcy and get your finances on the right track.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. If this is happening to you, then learn about the laws where you live. When it comes to bankruptcy, states have varying laws. Your house is safe in certain states; however, in other states, it isn’t. Know what the laws are in your state before filing.
If possible obtain a personal recommendation for a bankruptcy lawyer instead of randomly choosing one. There are many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.
If you aren’t totally honest about your assets when filing a bankruptcy petition, you could get into serious trouble. Wherever you file, that court has to be made aware of all details regarding your finances, positive and negative. Don’t hold anything back and formulate a smart strategy to deal with the reality you are facing.
Avoid paying for a consultation with the bankruptcy attorney, but do ask many questions. The majority of lawyers offer their first consult at no cost, so ensure you meet with several to find one that you like. Choose to file only if your lawyer has convinced you that this is the best decision. It is not necessary to make a final decision right away. Be sure to talk with a number of lawyers, and compare the information you receive.
Before declaring bankruptcy, be sure you’ve weighed other options. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
Chapter 7
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Every one of your debts will be gone if you decide to go with Chapter 7. Any ties you have concerning creditors will definitely be dissolved. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. It’s important to know what differences come with every type of bankruptcy. This will let you find out what’s best for you.
Your most important concern is to protect your home. Filing bankruptcy does not necessarily mean that you will lose your house. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
If you are going to be filing for bankruptcy, think about filing Chapter 13. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. 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. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
Make time to visit with family and friends during the bankruptcy process. Filing for bankruptcy is a difficult process. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. A lot of folks decide to hide themselves from the world around them until the end of the process. But, keeping to yourself is likely to cause even greater sadness and despair. This is the reason that you need to take the time out to spend time with everyone you love despite what your financial situation is.
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. You can relieve yourself of any liability for debts that you may share with someone else through a Chapter 7 filing. However, your creditors will be able demand that your co-debtor pays the debt off in full.
If you decide to file for bankruptcy, it’s important that you’re educated about your rights. Occasionally, debt collectors will attempt to convince you that your debt isn’t eligible for bankruptcy. What you can’t file on is very small, like student loans or child support payments. If a bill collector attempts to say their bill cannot be discharged, look it up. If they are wrong, report them.
There is a great amount of emotional and mental stress associated with filing for bankruptcy. One way to help reduce is this stress is to hire a reliable attorney. Try not to pick a lawyer based on cost alone. The cheapest attorney may not be the best, but the most expensive may not be the best either. Speak with trusted people, check the BBB and take advantage of the free bankruptcy attorney consultations. You might even go to a bankruptcy hearing to watch how a lawyer presents his case.
In most cases, bankruptcy isn’t really your only option. By using this article you will be well on your way to avoiding bankruptcy. Apply the tips from this article to make positive changes to your life and financial situation.
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