Nowadays, more and more people are facing the sad reality that they have no choice but to file for bankruptcy. The economy can be partially to blame for the rise in bankruptcy. Before you even consider going through the bankruptcy process, it is crucial you educate yourself on all things related to bankruptcy so you can make the best decision for you. This article is going to give you that knowledge.
Before you file for bankruptcy, carefully consider if it is the right option for you. You have other options available like consumer credit counselling services. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
Do not give up hope. If you’ve had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy. You should be able to get your possessions back if they have been taken away from you within 90 days before you filed for bankruptcy. Talk to your lawyer to find out how to go about properly filing a petition.
Before you file, make sure you understand current bankruptcy laws. Bankruptcy law evolves constantly, and it’s important to stay up-to-date to ensure that you file properly. A qualified bankruptcy attorney is the best source for the latest information regarding the laws in your state.
See if there is an alternative you can use before declaring bankruptcy. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. You may have the ability to negotiate much lower payments, just be sure any debt modifications you agree to are written and that you have a copy.
Chapter 7
The two main kinds of bankruptcy are Chapter 7 and Chapter 13. Make sure you understand them so you know what is best for you. The Chapter 7 variety can help you eliminate your debts almost entirely. This type of bankruptcy ends any relationship you might have with creditors. 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. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
Consider Chapter 13 bankruptcy for your filing. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. This type of bankruptcy protects your assets from seizure and lets you repay your credits over the course of a few years. The length of the plan is generally up to five years, and when this is over, you will be free of unsecured debt. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
If you are in the midst of a Chapter 13 bankruptcy, it is possible to apply for certain loans. But, it could be harder. Normally, the trustee assigned to your bankruptcy must approve any new loan. In order to show that you’re capable of paying off your new loan, prepare a budget that includes its payments. An explanation of need will also be necessary.
Make sure you understand your rights as you file for bankruptcy. Certain unscrupulous creditors will try to convince you that certain debts can’t be discharged in bankruptcy. However, there are few debts that cannot be eliminated, like student loans and child support payments. If your creditors are telling you any other kind of debts cannot be cancelled, get a written proof and send it to the general office of your state’s attorney to report this illegal behavior.
Filing for bankruptcy is hard on anyone, and can cause extreme amounts of stress. To avoid getting too stressed, make sure you hire a reputable bankruptcy attorney. Do not solely use cost to determine whom to hire. It may be not be necessary to hire a costly attorney; just make sure he or she is qualified to handle your case. Ask for referrals from folks who have filed and check reputations with the BBB. You might be able to view a court hearing. You might be able to watch how your prospective attorney handles the case.
When you are filing for bankruptcy, make sure you list all of the financial information you may have. If you forget any items, your filing could be rejected. Even if you think a sum is insignificant, add it into your documentation. Include any income from jobs that you do on the side or assets, such as property and vehicles.
If you are planning to file bankruptcy, avoid taking large cash advances from credit cards thinking 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.
Clearly, the economy nowadays has had a dreadful effect on individuals and has caused bankruptcy to be a topic that is on everyone’s minds. To help you make good decisions regarding bankruptcy, consult with this article and use the knowledge to your advantage.
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