Bankruptcy can be both a relief and a stressful situation. On one hand, people will be scrutinizing your private financial affairs. On the other side, you will no longer receive calls from bill collectors and you can work on your finances. Keep reading for a few smart suggestions for making bankruptcy a smoother process.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Read up on the topic and familiarize yourself with the benefits and drawbacks of both variations. If the information you read is unclear to you, take the time to go over the specifics with your lawyer before making a decision on which type you will want to file.
Do not forget to be around those you love. Bankruptcy can really wear down your emotional reserves. It takes time and a lot of people feel stressed and ashamed throughout this procedure. Avoidance of friends of family during the process is not uncommon. This is not a good idea because staying alone could cause serious problems with depression. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
If your paycheck is larger than your debts, avoid filing for bankruptcy. Though bankruptcy may appear to be a good way to escape your debts, it does affect your credit negatively for a fairly long time.
Although the entire process can be stressful, do not allow the stress to take over. Lots of debtors are stressed out when they’ve come to filing time. Don’t let the process control you in a negative way. You will get through it, and you should make an effort to remember that. Your life will most likely improve once you’re over this hump, so relax.
Chapter 7
Before you make the decision to file Chapter 7 personal bankruptcy, take time to think about anyone it could affect. When filing Chapter 7, you are not legally responsible for the debts in your name. But, creditors will ask for the money from your co-debtor.
Because bankruptcy is such a challenging time that a great deal of stress, both mental and emotional, may be involved. If you want to protect yourself from stress, see to it that you hire a good attorney. When choosing an attorney, cost isn’t the only thing to look at. While the person you select does not have to cost the most, they should be competent and reliable. Rely on word-of-mouth referrals from others who have filed for bankruptcy, check the BBB, and take advantage of free consultation offers. Try attending a hearing to find out how bankruptcy attorneys handle the situation.
When you are filing for bankruptcy, make sure you list all of the financial information you may have. Forgetting anything can cause a delay, or even a dismissal. Even small amounts of money contribute to your overall financial picture, so do not exclude them. Include any income from jobs that you do on the side or assets, such as property and vehicles.
Take a look at all of your financial options before filing for personal bankruptcy. You should consider credit counseling. There are various non-profit companies that may be able to help you. They can work with both you and your creditors to find a feasible way in which your debts can be paid off. You pay them and then they pay the creditors.
Credit Cards
Many people who file for bankruptcy vow to stop using credit cards. This is not wise because you need to rebuild a good credit file. Credit cards are necessary for proving that you have gained financial stability and for garnering mortgage and auto loan approvals. Start with one single credit card, and rebuild your credit once more.
Be certain to create a list that displays all the debts you want discharged when you file. Anything not specifically listed on the filing will be excluded in the final bankruptcy. It is up to you to ensure your debts are written down so you don’t need to pay bills that might have been discharged.
If you get a new job right before filing for personal bankruptcy, keep going with your initial plans to file. Bankruptcy may be the solution for you, even with your changed circumstances. Your timing can make a tremendous difference when filing for personal bankruptcy. As long as your bankruptcy filing is posted prior to receiving income from your new job, this additional income will not be considered.
Bankruptcy has several pros and cons. No matter why you are filing, you must remember that knowledge is the key to help during the process. What you read above can easily help you get a handle on the entire process. If you use these tips, you can file for bankruptcy with the confidence that only information can instill.
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