There are quite a number of people who have been affected by the economy, and now find themselves buried in debt. If you are in this situation and do not take take action, things will only get worse as collection agencies try getting their money. If this is happening to you, personal bankruptcy may be an option. The information in this article will help you to decide if this is an option for you.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If this is happening to you, then learn about the laws where you live. Laws differ from one state to the other. Some states may protect you home, and some may not. Be sure you educate yourself on local laws prior to filing.
If you can, get a word-of-mouth referral for a lawyer. There are so many dime-a-dozen companies out there who make it a practice of preying on financial desperation. You need to make sure your bankruptcy goes smoothly, so find someone you know you can trust.
Prior to filing your bankruptcy petition, go over the list of assets that cannot be seized by creditors. To find an itemized list detailing assets exempt from bankruptcy, find the Bankruptcy Code. You can determine exactly which of your possessions are at risk by consulting this list before you file. If you fail to go over this list, you may be unpleasantly surprised sometime down the road if any of your most valued items are seized.
Chapter 7
Make sure that you understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. Chapter 7 eliminates all debts. Any debts that you owe to creditors will be wiped clean. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.
Take advantage of the opportunity to consult with a number of bankruptcy lawyers who offer the first visit at no charge. Never settle for speaking with a paralegal or an assistant. They are not trained, nor allowed, to pass on legal advice. Look for an attorney until you find one you feel comfortable with.
Safeguard your home. Losing your home is thought of as common in bankruptcy cases, but it is by no means inevitable. 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 could also check out the homestead exemption. This lets you continue living in your house, depending on whether you meet certain financial requirements.
Learn about teh differences between Chapter 13 and Chapter 7 bankruptcy. Research them online to see the positive and negative aspects of each one. If you don’t understand the information you researched, consult with your attorney about the details before you decide which type of bankruptcy you want to file.
Personal Bankruptcy
If you are considering filing for personal bankruptcy, be certain that this is really the right course of action for you. Consolidating current debt could make it easier to manage. It can be quite stressful to undergo the lengthy process of filing for personal bankruptcy. It will also harm your ability to secure credit in years to come. This is why you must make sure bankruptcy is your last resort.
If you are earning enough to cover your bills, don’t file for bankruptcy. Sure, bankruptcy can get rid of that debt, but it comes at the price of poor credit for 7-10 years.
Make sure the time is right when you file a bankruptcy claim. Timing is critical, particularly when it comes to filing for bankruptcy. There are situations in which it is in your best interest to file immediately, but other times it is advisable to wait. Discuss your particular situation with your bankruptcy attorney to determine the best time to file.
If you are thinking about filing for bankruptcy, one of the first things you should do is look into the laws of your state. You need to know certain things, like the fact that it’s illegal to transfer any asserts 12 months before filing your claim. Also, you must never incur significant new obligations must prior to filing for bankruptcy.
Include your entire financial information when you file for bankruptcy. Forgetting anything can cause a delay, or even a dismissal. Even if it’s a small sum, make sure it is listed. This includes income from second or part time jobs, vehicles and loans.
If you plan to pay debts off before you file for bankruptcy, be careful. The bankruptcy code stipulates that you cannot make certain payments to creditors or family for specified periods of time before filing. Know what the laws are prior to making any payments.
Understand that in the long run, a bankruptcy filing may be better than continued missed paymsent when it comes to your credit score. Although filing for bankruptcy stays on your financial record for 10 years, you can immediately begin to improve your credit. The main benefit to filing for bankruptcy is the chance at a new start.
Once you decide to file, it is important to act in a more financially responsible manner. Don’t go on a spending spree or increase your debt right before you file. Creditors and judges look at your current and past financial history when they make a decision about your personal bankruptcy. Your present handling of your finances will show that you are doing your best to change bad habits.
You have undoubtedly gleaned from the text above that bankruptcy doesn’t have to be a difficult process as long as you’re informed. If you deal with your stress in a positive way and make level-headed decisions, your bankruptcy filing will be a step in the right direction for a renewed financial future.
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