The economy is terrible today. When there is a bad economy there are a lot of people losing their jobs and having problems with debt. Debts can often lead to bankruptcy, an outcome nobody ever wants. If you would like to know how to get yourself or your friend out of filing for bankruptcy, read on for some possible answers.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. Bankruptcy rules vary by jurisdiction. For instance, your home might be protected in some states while you might lose it in others. Do not file before learning about the bankruptcy laws in your state.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. Alternatives do exist, including consumer credit counseling. Bankruptcy permanently affects your credit, so avoid filing until you have exhausted all of your other options.
Once you file for bankruptcy, you will have a hard time getting loans or credits. If this happens to you, think about applying for a couple of secured credit cards. By doing this, you will be letting people know that you want to fix your credit score. After some time passes they may be willing to offer you unsecured credit.
Determine which assets won’t be seized before filing for bankruptcy. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. You can determine exactly which of your possessions are at risk by consulting this list before you file. 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.
You must be entirely candid when it comes to declaring assets and obligations in your bankruptcy petition. Whoever provides your legal consultation must be privy to all of your financial information. Lay everything out on the table so that you and your lawyer can devise a plan to get you out of this mess.
Chapter 7
Make sure that you understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. Chapter 7 involves the elimination of all of your debt. All happenings with creditors will disappear. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. But, it could be harder. You will need to secure the trustee’s approval for any new debt obligation. When meeting with the trustee, bring a budget which shows that you will be able to afford the payment on the loan you are trying to get. You will also need to explain why it is necessary for you to take out the loan.
Understand the rights you have as a bankruptcy filer. Collectors may try to convince you that your debt can’t be discharged. There are few debts that can’t be discharged. If you are told differently by a collector, research the information yourself. If you find they are in error, get the name of their company, phone number and any identifying info so you can report it to the attorney general in your area.
Avoid Bankruptcy
The economy is rebounding slowly, but there are still people who can’t find employment that pays a living wage. Even if you do not have a steady income, you may still be able to avoid bankruptcy. Hopefully, you are now aware of how to get yourself or your loved ones on the right track in order to avoid bankruptcy. Also, try to remember that tomorrow provides you with a fresh start.
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