Personal Bankruptcy Advice For Those Who Need To File

It isn’t always easy to file for personal bankruptcy. All types of bankruptcy exist. The kind that you select depends on your finances and your debt. Before you decide to file for personal bankruptcy, you need to educate yourself about it. Here are a few wise tips to help you in your decision.

Lots of people have to claim bankruptcy when their bills are larger than their income. If this is your case, you should do some research about bankruptcy laws in your state. Different states use different laws when it comes to bankruptcy. In some states, your home is protected, while in others it is not. Do not file before learning about the bankruptcy laws in your state.

You can find a wealth of information concerning personal bankruptcy by searching for websites which offer information about it. The U.S. Justice Department, the ABI (American Bankruptcy Institute), as well as the NABCA (National Assoc. Consumer Bankruptcy Attorneys) are excellent sources of information. The greater your body of knowledge, the better prepared you will be to make the decision of whether or not to file and to make certain that if you do file, the process is a smooth one.

Consider all options before deciding to file for personal bankruptcy. Avail yourself of other options, including consumer credit counseling, if they are appropriate for your situation. Bankruptcy has a negative effect on your credit reports, in that it is permanently there. Before you take this step, make sure all your options have been considered.

One of the most important things to remember when filing for bankruptcy is to be honest and truthful every step of the way. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.

It is important to list all your assets and liabilities during the bankruptcy proceeding. Failure to do so will only cause you problems in the end. The lawyer representing you when you file needs to have full knowledge of your financial situation. Don’t hold back information and create a strategy so you can deal with what’s really happening.

Ask for a free consultation with your bankruptcy attorney and ask questions about experience and education. Most lawyers offer free consultations, so talk to a few before making your decision. Only choose a lawyer if you feel like your questions were answered. You don’t need to decide what to do right away. Be sure to talk with a number of lawyers, and compare the information you receive.

If you’re unsure, then you need to learn what a Chapter 7 bankruptcy can do for you, as opposed to what Chapter 13 does. Spend time researching the advantages and disadvantages of filing for each one of these. If the information you read is unclear to you, take the time to go over the specifics with your lawyer before making a decision on which type you will want to file.

Chapter 7

Before you choose Chapter 7 bankruptcy, think about what effect that is going to have on any co-signers you have, which are usually close relatives and friends. When filing Chapter 7, you are not legally responsible for the debts in your name. However, your creditors will be able demand that your co-debtor pays the debt off in full.

Do not use the word “shame”, if you go bankrupt. Going through bankruptcy can cause you to lose a lot of self-esteem. These are useless emotions, however, and can be harmful to your mental state. Keep a positive state of mind to deal with your tough financial situation.

A lot of individuals who have found themselves filing for bankruptcy think that they will never borrow money or use a credit card again. The fallacy in this thinking is that credit is needed to improve your credit history again. Good credit is needed to make major purchases, such as those for homes and automobiles. However, if you don’t use credit, you will be unable to establish a good credit history, which is necessary in order to make those purchases. Keep it simple with one card and take a slow approach to rebuilding.

As you now know, bankruptcy is not a decision that should be made lightly. If you feel that it is your best option for your current financial state, you should contact an experienced bankruptcy lawyer who can advise you in this turning point in your life.