Because of the way our economy works, driven by consumer debt, bankruptcy claims are becoming increasingly commonplace. The recession has hit many people very hard. However, before you make the decision to file for personal bankruptcy, you should understand the filing process and thoroughly investigate whether it is the right choice for you. This article will teach you what you need to know.
If you are going through a bankruptcy do not fall victim to guilt and pay off debts that you do not need to pay. Unless there is no other choice a retirement account should not be used. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
One of the most important things to remember when filing for bankruptcy is to be honest and truthful every step of the way. Lying on your filing can cause dire consequences such as: delays, penalties, being prevented from re-filing, or even jail time.
Don’t file for bankruptcy until your represented by an attorney. There are many different aspects to filing bankruptcy, and you may not understand everything there is to know. When you engage the services of a bankruptcy lawyer, you can be assured of getting the help your need to proceed correctly.
Do some research about laws and legislation before filing. It can be tough to keep up with them on your own, and because they change often, a bankruptcy attorney can help you keep track for the sake of your filing process. To find out about these changes, you can look at your state’s legislation website or contact their office.
Chapter 7
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. The Chapter 7 variety can help you eliminate your debts almost entirely. Any ties that you have with creditors will be dissolved. If you file using chapter 13 bankruptcy, you will go through a sixty month repayment plan prior to all your debts being completely dissolved. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
Consider filing for Chapter 13 bankruptcy. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. This lasts for three to five years and after this, your unsecured debt will be discharged. Just know that missing one payment could cause your case to be dismissed.
When your income surpasses your bills, you should not be filing bankruptcy. While bankruptcy may seem like an easy way out of having to pay back all of the debt that you owe, it is a stain that will remain on your credit report for seven to ten years.
Think about all your options before pulling the trigger. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. If you are facing foreclosure, consider a loan modification plan. The lender wants their money, so they may be willing to forgive some fees, change the loan term or reduce interest as ways of assisting you. Creditors would rather be repaid, however slowly, than have you declare bankruptcy.
If you are concerned about keeping your car, check with your attorney about lowering the monthly payment. Filing under Chapter 7 is usually a good way to lower your payments. You need to have bought your car 910 days before you file, have a loan with high interest and you’re also going to need a good work history.
See to it that you are aware of the laws concerning bankruptcy before you consider filing. Here is one example, an individual who files for bankruptcy cannot transfer any assets for a year before the filing date. Additionally, it is against the law for any filer to boost up the debt amount they carry on any credit cards just before filing.
Exhaust all other option prior to filing personal bankruptcy. Credit counseling is an important option for you to pursue. You can easily find non-profits that can assist you in your debt struggles. They can work with both you and your creditors to find a feasible way in which your debts can be paid off. All you have to do is give them your payments and they handle paying the creditors.
Realize that bankruptcy may be better for you when it comes to your credit. Continuing to miss your payments can be really bad on your debt. The good news here is that, even though the bankruptcy claim will leave a decade-long stain on your credit score, you can still work to repair your credit. Among the advantages of bankruptcy is that of a clean slate.
As previously noted, bankruptcy is very common today, particularly because of the current economy. To make sure the best decisions are being made in terms of bankruptcy, use this advice.
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