When someone has to file for bankruptcy, it is never a good thing. Bankruptcy can be a bad sign and can be embarrassing to tell others about in regards to your financial status. Don’t let bankruptcy overwhelm you; the article below can help.
Credit History
Ask yourself if filing for bankruptcy is the right thing to do. You have other options, including consumer credit counseling help. Bankruptcy leaves a permanent mark on your credit history, so before you take such a large step, you want to exhaust all other options so that the future effects on your credit history are as minimal as possible.
Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. You should make every effort to leave your retirement accounts untouched until your retire. Your savings accounts offer valuable financial security so try to leave them intact.
Instead of getting your lawyer from the yellow pages or on the Internet, try your hardest to find one with a personal recommendation. You want your bankruptcy to go smoothly, and the Internet is rife with fly-by-night companies whose only goal is to prey upon the financially desperate.
It is important to list all your assets and liabilities during the bankruptcy proceeding. Failure to do so will only cause you problems in the end. 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. Don’t hold back information and create a strategy so you can deal with what’s really happening.
You should be able to meet with a specialized lawyer for free to ask your questions. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. The lawyer who properly answers your questions is the one you should hire. It is not necessary to come to a decision immediately following the meeting. So you have sufficient time to speak with a number of lawyers.
Chapter 7
Know the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 eliminates all debts. Any debts that you owe to creditors will be wiped clean. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. 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.
Take some time after filing for bankruptcy to enjoy life. Filing for personal bankruptcy can be very stressful for the debtor. 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. Life will get better; you just need to make it through the bankruptcy process.
If you really want to keep your vehicle, speak with your lawyer about possible choices. In many cases, you can reduce your payment by filing a Chapter 7 petition. There are a few requirements that you have to meet to be eligible, though. You have to have bought the car more than 2.5 years ago, your loan’s interest rate needs to be over a certain amount, and your employment history has to be good.
It is important to understand your rights when you file for bankruptcy. It is not unusual for creditors to claim that their debt is not able to be discharged. There are not many debts that can not be bankrupted, student loans and child support for example. If a debt collector tells you this false information, seek the advice of your bankruptcy attorney. You may also want to report the bill collector to the attorney general’s office.
As you have learned, bankruptcy can be avoided. The tips here can help provide you with some guidance to avoid filing bankruptcy. Start using what you learned today and see how much of a change you can make in your life, so that you do not have to harm your credit history.
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