While bankruptcy is often a last-resort measure, sometimes it’s simply unavoidable. Although bankruptcy tends to destroy a person’s credit, it’s occasionally the only available option. The article below discusses some of the pros and cons of filing bankruptcy.
Individuals often seek to file for personal bankruptcy protection if their debts exceed their ability to repay them. If this is the case for you, you should begin to investigate the legislation in your state. Each state has its own set of rules regarding bankruptcy. You may find your home is safeguarded in one state, while in another it isn’t. It is best to become familiar with your state’s laws regarding bankruptcy before you take the steps to file.
Be sure everything is clear to you about personal bankruptcy via looking at websites on the subject. The United States Check out the Bankruptcy Institute site and do some research about consumer’s rights. Knowing is half the battle, after all, and these websites are the first step in learning what you need to know to make your bankruptcy smooth and stress-free.
If filing bankruptcy is in your future, don’t waste any savings you may have attempting to pay off your debts. Retirement accounts should never be touched if it can be helped. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
Research what assets are exempt from seizure before you decide to declare bankruptcy. The Bankruptcy Code has lists of various asset types that are exempt during the process. You need to read the exemptions for your state, so you know what property you can protect. If you aren’t aware of this, you could lose some assets that you value.
When you do meet with a lawyer make sure that they answer all of your questions and that they do not charge you for consultation alone. Almost all lawyers will give a free consultation, so meet with more than one before making a decision on whom to hire. Therefore consult with different lawyers and get a feel for them, then decide which one suits your needs You need not decide right away. This offers you the opportunity to speak with other attorneys.
Before declaring bankruptcy, ensure that all other options have been considered. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. Also, if you just contact your creditors and speak to them plainly and truthfully, the odds are good that you can negotiate a better payment structure that you can afford.
Chapter 13
Do some research to find out more about Chapter 13 and Chapter 7. If Chapter 7 is what you file, your debts will get eliminated entirely. This type of bankruptcy ends any relationship you might have with creditors. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. Take the time to learn more about these different options so you can make the best decision possible.
Think about all the choices available to you when you file for bankruptcy. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. Loan modification can help you get out of foreclosure. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. Above all else, what creditors want is to get their money. Sometimes they would rather settle for a repayment plan instead of a debtor who is bankrupt.
Know your bankruptcy rights. Don’t take a debt collectors word for it simply because they tell you that you can’t have many or all of your debts erased by bankruptcy. Only a few debts, including child support and tax liens, are ineligible for bankruptcy. If the bill collector is trying to deceive you, then report that company to your local attorney general’s office.
Be sure you’re acting when the time is right. Proper timing is important, especially when it comes to personal bankruptcy. While there are times that it is ideal to file soon, there are other times in which you should wait. The professional advice of a bankruptcy lawyer can help you pin down the best time to file given your current financial state.
Keep the concept of shame out of your head if you are contemplating bankruptcy. Often, with bankruptcy, come feelings of guilt, shame and worthlessness. Do not let these negative feelings influence your decision. Keeping a positive attitude during worrisome financial trouble is the smartest way to deal with a bankruptcy.
Don’t just assume bankruptcy is the right option, especially if you have not considered others. Credit counseling is an important option for you to pursue. Many different non-profit entities exist that can assist you without charging you any fees. They will make arrangements with your creditors so you will have lower payments as well as lower interest rates. They collect payments from your and then pay the creditors.
As said in the beginning of the article, personal bankruptcy is always an option. Of course, it may not be best for all situations and can even make your credit matters worse. Learn all that you can about bankruptcy before you file. That way, you will be prepared to make the best decision for a happy financial future.
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