The path to bankruptcy is not normally a happy one, but your life can improve once the filing has occurred. With a clean slate, it is possible to start over both financially and personally. Keep reading to see how bankruptcy can actually give you a new lease on life, rather than function as a permanent financial albatross.
If you are going through a bankruptcy do not fall victim to guilt and pay off debts that you do not need to pay. No matter what you do, do not touch your personal savings unless there is no other option. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
You should never give up. If you file for bankruptcy at the right time it could enable you to get your property back that you lost to repossession. If your personal property was repossessed within 90 days before your bankruptcy filing, you may have a chance of getting it back. Consult with a lawyer who can help you along with filing the petition.
If you are about to file for bankruptcy, then make sure you hire a lawyer. It is difficult to make all of the necessary decisions yourself, and expert guidance will be helpful. Talk to a bankruptcy lawyer, they can help clarify anything that you might have confusion with.
Protect your home. You don’t have to lose your home just because you are filing for bankruptcy. It depends what your home value is and if there is a second mortgage, as all this stuff comes into play when determining if you can keep the home. You may also want to check out the homestead exemption because it may allow you to keep your home.
It is important to know how Chapter 7 filings differ from Chapter 13 filings. Take the time to find out about each one online, and look at the advantages and disadvantages of each. If you’re really not sure how this all works after your research, meet with your lawyer and ask them prior to making a decision.
Chapter 7 Bankruptcy
Keep in mind that filing for Chapter 7 bankruptcy may affect other people than just you, including family members, and in some cases, business associates. Once you complete a Chapter 7 bankruptcy, you will be free of any responsibility of debt, which could put all responsibility on someone close to you. However, if you had a co-debtor, they will be required to pay the debt.
You can take out a mortgage or car loan while filing Chapter 13 bankruptcy. This is harder. Your trustee must approve any new loans. Draw a budget up and show how you can pay the newer loan payment. You should also be prepared to explain why you need to purchase the item.
Typically, people who have faced bankruptcy swear off credit cards. This is not a good decision on their part because credit cards help in building good credit. If you do not rebuild your credit rating, you will not be able to buy a car or a home on credit again. Take it slow and get yourself one credit card and slowly rebuild your credit.
When you file for bankruptcy remember that you are not going to lose all your assets. You can keep your personal property. This covers items such as clothing, jewelry, electronics and household furnishings. Depending on your financial situation and what state you live in, you might be able to keep property such as your home and car, or even recover property that has been recently repossessed.
If you are filing for bankruptcy, be sure you are being honest, no matter how dire your situation is. One of the worst things you can do is lie about your debts and assets. This activity is illegal. If you lie, there is a chance that you will land in prison.
Some attorneys offer a phone service for free where creditors will be referred to when they wish to contact you regarding an account that’s delinquent. When a debt collector calls the number, they will be able to obtain verification that your personal debt is in the process of bankruptcy filing. Once this is done, they will cease and desist calling you.
Chapter 13
Filing for a different type of bankruptcy is a good idea if you think you will lose your home. Try Chapter 13 instead of Chapter 7. Sometimes the best thing to do is completely convert your Chapter 7 bankruptcy case to a Chapter 13 bankruptcy case. You’ll need to discuss this with your lawyer.
Judging from the information contained within the article alone, you can now see that there are ways to get out from under the piling debt. However, the story that gets written after bankruptcy does not have to be depressing too. Actually, if you use the advice and ideas from this article, you will be able to turn bankruptcy into a turning point for your life.
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