Personal Bankruptcy: Is It The Right Choice For You?

It can be a complicated process to file for personal bankruptcy. There are multiple ways you can file for bankruptcy, and the one that best fits you will depend on your financial situation and what you owe. Therefore, it is essential that you learn about bankruptcy prior to petitioning the courts for bankruptcy protection. The advice in this article can be a good starting point for you.

If you are planning to file for bankruptcy, be sure to learn what types of assets you will be able to keep and which can be seized. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. If you aren’t aware of this, you could lose some assets that you value.

Any bankruptcy consultation should be free of charge. Most lawyers offer free consultations, so consult with a few before settling on one. The lawyer who properly answers your questions is the one you should hire. You do not need to make a decision immediately after the consult. After your consultations, do some additional research on each attorney you consider qualified for the job.

Chapter 7

There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Make sure you know what each entails so you can make the right choice. Chapter 7, for example, will wipe away every one of your outstanding debts. Any ties that you have with creditors will be dissolved. Bankruptcy under the rules of Chapter 13, on the other hand, require you to work out a payment arrangement to pay back the agreed upon amounts. Take the time to learn more about these different options so you can make the best decision possible.

Investigate other alternatives before resorting to bankruptcy. A lawyer that specializes in bankruptcy law can help advise you of other options, such as repayment plans and reducing interest rates to relieve some of the burden. If you are looking at foreclosure, think about a loan modification program. Your lender can adjust your loan in many ways including extending the time you have to pay, reducing your interest rate, or canceling some of your late fees. Because of the fact that creditors would like to see their money they are likely to offer repayment plans versus not getting paid at all if you file for bankruptcy.

See if your attorney can help you lower your payments if you want to keep your vehicle. Many times, payments can be lowered through Chapter 7 bankruptcy. 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.

Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. Of course, it’s difficult. First, your trustee will have to approve the loan. 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 should also be prepared to explain why you need to purchase the item.

Never take big cash advances from the credit cards that you own prior to filing for bankruptcy, even though you know that the debt will be erased. This is illegal. It’s fraud, and you can still be responsible for paying it back even after declaring bankruptcy.

It is not uncommon for those who have endured a bankruptcy to promise to never utilize credit again. This is not a good decision on their part because credit cards help in building good credit. If you aren’t using any credit, then it will be very difficult to get your credit score high enough to be able to purchase things like a car or home in the future. Choose a single card to get started on your credit repair journey.

As you can see, you should give bankruptcy a lot of thought before deciding whether or not you should file. If you feel that bankruptcy best suits your current financial position, then ensure you retain an experienced attorney who can help you.