Personal Bankruptcy: Use These Tips To Help You Get Through It

Being severely in debt is a very frightening experience. There are times that having a small financial problem turns into a huge one. Once you realize you have to handle the problem, the real struggle begins. The piece that follows does offer some guidance about how to handle bankruptcy when your burden becomes to much to bear.

Try to make certain you are making the right choice prior to filing your petition. You have better options. For example, you could try credit counseling. Bankruptcy is a serious negative on your credit history so make sure you have no other options before you file. It is important to keep your credit history as positive as possible.

When it soaks in that filing for personal bankruptcy, don’t use all of your retirement funds, or all of your savings to resolve insolvency or pay creditors. Don’t touch retirement accounts unless you don’t have a choice. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.

It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.

Chapter 13

Consider Chapter 13 bankruptcy for your filing. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Keep in mind that missed payments will trigger dismissal of your case.

Filing for bankruptcy should not be done on a whim. Talk with a bankruptcy lawyer and ask about alternatives, such as debt consolidation or negotiating with creditors. If a foreclosure is on your horizon, look into loan modification plans. There are a lot of ways that your lender can assist you, such as reducing interest rates, eliminating late fees, or extending the term of your loan. Most creditors will be willing to work out an option to avoid not getting paid at all.

After you have filed for bankruptcy, enjoy your life. The process of filing for bankruptcy can make people a nervous wreck. You do not want to have to deal with depression in addition to your financial troubles, so you should take steps to keep yourself happy. Your life will see improvement after you get past the bankruptcy.

Chapter 7

Think about any co-debtors you have prior to filing for Chapter 7 bankruptcy. You will be freed of responsibility for debts that you share if you make a successful Chapter 7 filing. Although filing for bankruptcy excludes your from financial responsibility, co-signers will still be expected to pay the loan amount in full.

You can still take out a car loan or mortgage while you are in Chapter 13 bankruptcy. This is a lot harder. You need to speak with your trustee so that you can be approved for a new loan. Create a budget and prove that you will be able to afford it. You will also need to explain why it is necessary for you to take out the loan.

Timing is everything. When it comes to filing for bankruptcy, your timing is important. There are times when you should file as soon as you can, but in some other situations it may be best to wait for the worst to be over. Discuss the strategic timing of your bankruptcy with your attorney.

Some things in life are inevitable. Apply the advice from this article to help yourself better understand filing for bankruptcy. Use the tips written in this article to make a big difference in your finances.

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