While bankruptcy is often a last-resort measure, sometimes it’s simply unavoidable. Filing for bankruptcy will ruin your credit score, but it might be the only way of getting out of debt. This article will help you learn many things about bankruptcy.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. Don’t hide income or assets from your lawyer or the bankruptcy trustee or you may find yourself in legal trouble.
Do not abandon hope. If you’ve had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy. Filing for bankruptcy may allow you to regain ownership of recently repossessed property. Talk with an attorney who can guide you through the process of filing a petition.
Chapter 7
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. All debt will be eliminated with Chapter 7. This type of bankruptcy ends any relationship you might have with creditors. A Chapter 13 filing involves a repayment plan, though. Typically, you will make a partial payment against your debts over the next 60 months before the balance of the debts is lifted. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Make sure your home is safe. Bankruptcy filings do not necessarily mean that you have to lose your house. You might be able to keep your home, contingent on certain factors, such as your home decreasing in value or having a second mortgage. You could also check out the homestead exemption. This lets you continue living in your house, depending on whether you meet certain financial requirements.
Once the initial filing period is over, ensure that you are getting out and enjoying life. The filing process is extremely stressful for a lot of the people who go through it. The stress of dealing with bankruptcy could cause you to fall into a depression, unless you take steps to take care of yourself. Life is going to get better once you get through this.
Go ahead and file for personal bankruptcy as soon as you realize it is necessary. Many people simply try to ignore their financial troubles, hoping that they will somehow go away, but this is a huge mistake. Debts can multiply very quickly, and can result in you losing money to wage garnishment, or even losing assets that are part of a secured loan. Once you’ve decided that you can’t manage your large amount of debt, it’s time to contact a qualified attorney.
Know the bankruptcy code backwards and forwards before filing. Here is one example, an individual who files for bankruptcy cannot transfer any assets for a year before the filing date. Also, it is illegal to load up your credit cards with debt right before filing occurs.
Before you file make sure that you are not doing anything to bring yourself in debt any more. Avoid running up current debts or taking on new debt just before filing for bankruptcy. Judges and creditors consider current history, as well as past history when adjudicating personal bankruptcy. Your present handling of your finances will show that you are doing your best to change bad habits.
Filing a claim doesn’t always result in losing possessions. Your personal items will stay with you. This will include things like clothes, jewelry and electronics. This will depend on your state’s laws, the type of bankruptcy you file for, and your financial situation, but you may be able to retain large assets like your home and car.
You do not need to halt your plans to file simply because you have changed jobs. Bankruptcy may still be right for you. The timing of filing is a huge factor. If you file before the new employment commences, your repayment options will be considered without this new wage figure being taken into consideration.
Resist the temptation to be dishonest when filing for bankruptcy. Lying about debts and assets is a huge mistake. There is no legal way to get around it. If you lie, there is a chance that you will land in prison.
Make sure you understand which debt obligations are likely to be discharged. Student loans and a few other things though, will not be forgiven. This kind of debt is best tackled through a loan consolidation company or an agency that specializes in credit repair.
As you can see by now, you do have the option of filing bankruptcy. However, you may wish to avoid it because of what it can do to your credit. Staying informed on how to manage this situation could prevent you from experiencing headaches and it can also help you keep your valuables.
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