Any situation leading to bankruptcy may not be happy, but your life can improve afterward. Bankruptcy is all about giving you a fresh start. Keep reading for how you can make bankruptcy a second chance instead of financial doom.
When people owe more than what can pay, they have the option of filing for bankruptcy. If you are in this position, you need to be familiar with the laws in your area. Each state has its own set of rules regarding bankruptcy. For instance, in some states you can keep your home and car, while other states prohibit this. Be sure to have some familiarity with the law in your jurisdiction.
When you feel certain that you must file for personal bankruptcy, refrain from squandering your life savings to pay off unsecured debt. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. If you have to use a portion of your savings, make sure that you save some to ensure that you are financially secure in the future.
Consider other alternatives before filing for bankruptcy. For example, if your debt is small, try a type of consumer counseling program. Also, you could try to get your payments lowered on your own. If you decide to do this, get a copy of anything you agree to.
Before filing a bankruptcy claim, make sure that your home is well protected. Bankruptcy doesn’t always mean you’ll lose your home. Depending on certain conditions, you may very well end up being able to keep your home. You can also investigate your state’s homestead exemption, an option that might enable you to keep your home if certain financial requirements are met.
Look at all of your options prior to deciding to file for bankruptcy. You might be able to address your debts by arranging a repayment plan or a reduction in your interest rates. Get professional advice on these matters from a bankruptcy lawyer. You can apply for a modification of your mortgage if your home is going into foreclosure. 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. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
If you have a co-debtor, consider the ramifications that filing a Chapter 7 bankruptcy will have. Speak to an attorney or read the bankruptcy laws in your state to find out if certain loans can be excluded from your filing. Sadly, this will not be the case for your co debtor. Your creditors may simply turn their attention to your hapless acquaintance.
When filing for personal bankruptcy you should always be aware of your rights. Do not take debt collectors at their word when they tell you that a specific debt can’t be discharged through bankruptcy. Most states allow for the majority of debt to be included on a bankruptcy. If you are told differently by a collector, research the information yourself. If you find they are in error, get the name of their company, phone number and any identifying info so you can report it to the attorney general in your area.
Do not wait until things go from bad to worse before filing bankruptcy. Some people will just ignore their outstanding debts, hoping that someone or something will come and save them, but this never ends well. Debt could become uncontrollable and by not dealing with them properly, your wages could be garnished or you may find your home in foreclosure. As soon as you stop denying that your debt is unmanageable, seek the advice of a good bankruptcy attorney.
Know the bankruptcy code backwards and forwards before filing. For example, it is forbidden for an individual to transfer any assets away from the name of the filer within the twelve months preceding filing. Maxing out your credit cards immediately before filing is also illegal.
Before you make the final decision to file bankruptcy, consider the other options you have. You may want to consider credit counseling. There are a number of companies that will assist you, many of which are non-profit. They can negotiate with each of your creditors to work out payments that you can afford, along with reduced interest rates. All you have to do is give them your payments and they handle paying the creditors.
If you intend to file bankruptcy soon, you may want to discontinue paying all debts. Bankruptcy laws generally don’t cover situations which occurred within a short time frame prior to filing, such as the previous 90 days worth of credit card debt. You need to know the law before you decide to file for bankruptcy.
You do not need to lose all your assets just because you file for bankruptcy. You will be able to keep your personal property. Some included items are: electronics, household furnishings, clothing and even jewelry. It is even possible that your home and one car will be safe, depending on the laws in your state, your exact financial situation, and the Chapter which you file under.
As stated in the above article, anytime someone is forced into bankruptcy is never a happy situation. However, what happens to your life after bankruptcy can have a happy beginning. Actually, by using the advice you’ve learned here, your story of hardship could have a happy ending after all!
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