When you are drowning in debt, you may find yourself scared. There are times that having a small financial problem turns into a huge one. When you find yourself in that position, it is not so simple to repair. This article will help you decide if bankruptcy is the way to resolve your debt problems, and if it is, give you some tips for navigating the process.
It is simple math; when you owe more than you are able to pay off, a bankruptcy is the likely solution. If this sounds like you, start familiarizing yourself with your state laws. Each state has its own laws regarding personal bankruptcy. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. Know what the laws are in your state before filing.
Exhaust every other option before making the decision to file for personal bankruptcy. You have other options, including consumer credit counseling help. Since your credit history will forever note the bankruptcy, you want to make sure that you have tried everything else before you take an action such as this, in order to minimize the effect it will have with regard to your credit history.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Don’t avoid telling your lawyer specific details with your case. Don’t assume that he’ll remember something from a month ago; tell him again. This is your bankruptcy case, so do not be afraid to remind your lawyer of any key facts.
Determine which of assets are safe from seizure and which are not before filing for personal bankruptcy. To find an itemized list detailing assets exempt from bankruptcy, find the Bankruptcy Code. It is important to be aware of this list so you will know what assets are saved. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. These kinds of laws are constantly changing and it is important that you are aware of these changes, so that you can learn how to properly file for bankruptcy. A qualified bankruptcy attorney is the best source for the latest information regarding the laws in your state.
Chapter 7
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Under Chapter 7 type bankruptcy, all debts are forgiven. You will no longer be liable for any money that you owe to your creditors. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
It’s a good idea to meet with a number of bankruptcy lawyers before settling upon one. The majority of them offer free initial consultations. Talk to the lawyer and not his assistant, who may not be legally able to help you. Comparing different lawyers makes it possible to find one with whom you work well.
Consider filing a Chapter 13 bankruptcy. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. However, if you miss even one payment, the court will dismiss your entire case.
Filing for bankruptcy should not be done on a whim. You might be able to address your debts by arranging a repayment plan or a reduction in your interest rates. Get professional advice on these matters from a bankruptcy lawyer. You can apply for a modification of your mortgage if your home is going into foreclosure. Your particular loan holders can provide a lot of assistance if you’re just willing to speak with them. You can negotiate lower rates, longer terms, and other means of repayment that may keep you from having to file a claim. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
Sometimes life just happens and you feel like there is little that you could do about it. Apply the advice from this article to help yourself better understand filing for bankruptcy. What you read were a collection of tips from the experts. Use the advice wisely to fix your finances once and for all.
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