A bankruptcy filing is never welcome. Bankruptcy is often a dire sign in a person’s financial life, and can cause significant embarrassment and shame. This article can help you deal with bankruptcy in the best way possible.
Always be honest with the information you give about your finances. Don’t hide income or assets from your lawyer or the bankruptcy trustee or you may find yourself in legal trouble.
Prior to filing for bankruptcy, discover which assets cannot be seized. The Bankruptcy Code has lists of various asset types that are exempt during the process. Make sure to review the list before filing a claim so you know if your valuables will be subject to seizure. You may find yourself unpleasantly surprised when the things you value the most are taken from you without warning. This is why it is very important the familiarize yourself with this list.
Before making your decision to file for bankruptcy, double-check to see if other, less drastic options could make sense. For example, if your debt is small, try a type of consumer counseling program. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.
Chapter 7
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves the elimination of all of your debt. Your responsibilities to your creditors will be satisfied. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. It’s crucial that you know the differences between all of the various kinds of bankruptcies so that you may choose the best option for your situation.
Protect your house. You do not have to lose your home in the process of a bankruptcy. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
Be sure you have no other choice but to seek bankruptcy. Consolidation could be the avenue you need to get your finances back in order. Declaring bankruptcy is a very involved process that can cause a good deal of anxiety. It will also make it tough for you to secure credit after your filing is complete. Personal bankruptcy should be undertaken as a last resort when no other workable options are available to you.
Do not file for bankruptcy if your income is greater than your bills. Understand that while declaring bankruptcy will eliminate many of your debts, you will have difficulty obtaining credit and will pay more in interest for the credit you do receive for at least seven years.
Once your initial filing is complete, it is time to take some time to relax a little. It is common for people to stress when filing. That stress can lead to depression, if you don’t take the right steps in fighting it. Once the process is complete your life will improve.
File when the time is perfectly right. Timing is critical, particularly when it comes to filing for bankruptcy. In some cases, you should file for bankruptcy right away, but in others, there may be reasons why filing quickly would be a bad idea. Speak with a bankruptcy lawyer about when the best time is to file for your specific needs.
Banish the word “shame” from your vocabulary before you file for bankruptcy. Filing for bankruptcy leads people to feel all sorts of emotions like shame, guilt and feeling irresponsible. Continuing to let yourself feel that way can damage your emotional health and does not benefit you in your endeavors to deal with your financial situation. Remembering to stay positive as you go through financial difficulties is a great way to deal with your bankruptcy filing.
It is important to not wait for the final minute to petition for bankruptcy. The judge reviewing your petition will consider your recent behavior, purchases, income and payments when making a decision. It is too easy for debt to mount up and become uncontrollable, which could lead to loss of assets or wages. Consider all possible options before filing bankruptcy.
See to it that you are aware of the laws concerning bankruptcy before you consider filing. There are often laws prohibiting the transfer of money from the filer for a certain period preceding the bankruptcy filing. Not only that, but the filer cannot lawfully accrue additional debt just prior to filing.
Think before you pay debts after you’ve decided to file. Find out from a bankruptcy attorney what a court needs to see as a cut off date for the last time you pay anyone you owe money to. Study applicable regulations prior to making any financial choices.
As you have learned, bankruptcy can be avoided. The advice you have read here will show you how you can escape the need to file for bankruptcy. Apply what you’ve learned here to make changes in your life that will not hurt your credit.
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