Just thinking about bankruptcy is a scary thought for many people. From fears of growing debt to worrying that they’ll no longer be able to provide for their families, people have good reasons to be scared. If this troubles you, or if you are dealing with this nightmare now, the following information is required reading.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. Do not hide any income or assets or go on a spending spree before filing for bankruptcy: the court will find out and will not have a positive opinion of you.
If possible obtain a personal recommendation for a bankruptcy lawyer instead of randomly choosing one. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.
Do not attempt to conceal any assets when filing for bankruptcy because you may be penalized when they are discovered. All of your financial information, be it positive or negative, must be disclosed to those in charge of filing your case. They need to know it all. Do not hold anything in secret and create a strategy on how you will deal with the things you are facing.
Put forth the effort to grasp the distinctions between Chapter 7 and Chapter 13 bankruptcies. There is a wealth of information online about each type of bankruptcy and their respective pluses and minuses. Before making any decisions, discuss the information you have learned with your lawyer.
If you can afford to pay your bills, bankruptcy is not a wise option. Though bankruptcy may appear to be a good way to escape your debts, it does affect your credit negatively for a fairly long time.
Gain an understanding of bankruptcy law before you file. When it comes to the code of personal bankruptcy, a large number of loopholes exist that could be troublesome. Small errors could even cause your case to be dismissed. This is exactly why it’s imperative that you take the time necessary in order to research what you can about bankruptcy. Doing this can make the process simpler.
Before you file for bankruptcy, be sure you know how to properly repay your debts. When you’re planning on filing bankruptcy, your finances have to be in a state of limbo, for lack of a better term. Paying off creditors, transferring assets, and acting in any way other than financially strapped may result in a failed claim. Know the laws prior to deciding what you are going to do.
Personal Items
Every single asset is not necessarily lost when you file for bankruptcy. Your personal items will stay with you. You may keep personal items like jewelry, household furnishings, clothes and electronics. The personal items that you are allowed to keep will depend on your home state’s individual bankruptcy laws, your personal financial situation and the specific bankruptcy that you are filing for.
Make sure you hire a good bankruptcy lawyer. Many newer lawyers enjoy this kind of law. Try to get a lawyer that has a lot of experience and one that is properly licensed. You can check histories of attorneys online, including disciplinary records and backgrounds.
Be sure that you include all debts you want discharged in your bankruptcy filing. Anything not listed will not be a part of the discharge. You need to ensure that you account for every debt, so you do not miss any that are eligible for being discharged.
Divorce can unexpectedly leave people in financial ruins. Divorce can bring on a lot of major changes, finances being one of them, and sometimes filing for bankruptcy is the only option. You should make every effort to attempt a fix.
Chapter 13
If you cannot qualify for a Homestead Exemption when filing for Chapter 7 bankruptcy, it is possible you might also be able to do Chapter 13 too, simply for your mortgage. Depending on your particular situation, you may in fact want to completely switch the type of claim you’re filing. Switching over to a Chapter 13 from a Chapter 7 is a smart play in some instances.
If filing for bankruptcy is stressing you out or getting you down, find an online support group to help you through the process. It goes without saying that there’s a lot of stress involved with bankruptcy. It can put a big strain on your personal relationships. You may share your struggle online and even others who’ve already been through it for advice on coping with the challenges.
Even though many of your debts are eliminated through Chapter 7 bankruptcy, not all debts go away. Certain debts are secured and will have to be reaffirmed through a new agreement: for instance, student loans cannot be erased by filing for bankruptcy. For example, child support payments, alimony and other court-related fines cannot be discharged by filing for Chapter 7.
Do not put off filing for personal bankruptcy. If you come to the conclusion that you must file for personal bankruptcy, go ahead. Procrastinating will not help. You will get more stressed and your debts will keep mounting. This unfortunate turn of events can affect your life quite negatively. When you file sooner, you’ll do a lot better.
Financial Future
Once you decide that bankruptcy is the best option, you should start doing some research about this procedure. Your financial future is at stake, so arming yourself with knowledge and staying proactive by engaging in the process with your attorney, helps ensure a more favorable outcome and better protects your financial future.
It’s normal for people to be scared of bankruptcy, since it really is a frightening process. Don’t let your fear take over. You now have the knowledge necessary to overcome the fear. Take this advice to heart, and do everything possible to improve your situation.
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