Nowadays, there are many people experiencing the woes of overwhelming debt. The bills keep adding up and it is never a friendly voice on the other line when the phone rings. If you are having financial difficulty, it is a good idea to research all your options, including bankruptcy. Keep reading to see if this is a viable solution for you.
Before undertaking the bankruptcy process, ensure you have made the correct decision. Consider any other options that are available to you, such as consumer 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.
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. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
Always remind your lawyer of specifics that are important to your case. Don’t assume that he’ll remember something from a month ago; tell him again. Speak up. This is your life, and your future depends on it.
If you know people who have filed for bankruptcy, ask them who they would recommend rather than relying on Internet reviews or worse, just randomly picking someone out of the phone book. Some companies just want to take advantage of you, so it is important that you have help from someone you trust.
Be completely honest whenever you file for personal bankruptcy. Hiding any asset or liability is a risk that will bite you in the end. The lawyer representing you when you file needs to have full knowledge of your financial situation. Don’t hold back information and create a strategy so you can deal with what’s really happening.
You should not have to pay for an initial legal consultation, and such meetings are great opportunities to ask lots of questions. Most lawyers offer free consultations, so consult with a few before settling on one. Don’t choose a lawyer until your questions about bankruptcy are sufficiently answered. You don’t have to make your decision right after this consultation. Be sure to talk with a number of lawyers, and compare the information you receive.
See if there is an alternative you can use before declaring bankruptcy. For example, you may want to consider a credit counseling plan if you have small debts. 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.
Chapter 7
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. If Chapter 7 is what you file, your debts will get eliminated entirely. Your former ties with creditors will cease to exist. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. 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.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Learn the benefits and drawbacks of each type before deciding which is right for you. Ask your bankruptcy lawyer to clarify anything you don’t understand before making a final decision about which type of bankruptcy to file.
Be sure you have no other choice but to seek bankruptcy. Many times a consolidation loan will ease your financial struggles. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. Having a bankruptcy on your record will hinder your ability to get credit in the future. Personal bankruptcy should be undertaken as a last resort when no other workable options are available to you.
Consider all options before filing for bankruptcy. For example, you can always talk with a lawyer to see about different options through creditors or other means that will not require wiping the entire slate clean. If you are looking at foreclosure, think about a loan modification program. Sometimes your lender will work with you to help pay off your debt by giving you a lower interest rate, forgiving late fees, or extending the time period of your loan. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
Make sure that you disclose every bit of financial information on your bankruptcy petition. Leaving out information either purposely or by mistake can prolong your petition, or have it dismissed completely. It is better to have something on there that you are unsure about, rather than not include it at all and risk a dismissal. This may include secondary employments, vehicles you own and loans you still owe money on.
Hopefully, you now understand that there are many options open to you when you are giving a personal bankruptcy filing serious thought. When you handle it correctly, a bankruptcy can resolve a great number of your financial troubles and enable you to start turning your life around.
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