Living with bankruptcy can be very difficult. You realize how limited you are when it comes to a tight financial situation. Your credit score has been damaged and it can be difficult to get loan approvals. However, although difficult, it is not impossible to secure a loan.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. Do not tap retirement accounts unless there is no other alternative. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. You need to read the exemptions for your state, so you know what property you can protect. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
It is imperative that you retain an experienced attorney if you are planning to file bankruptcy. Having a lawyer on your side is the best way to avoid mistakes and bad decisions. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.
Chapter 13 Bankruptcy
Look into filing Chapter 13 bankruptcy. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. You can secure your home under Chapter 13 and pay your debts with a payment plan. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Missing a payment under these plans can result in total dismissal by the courts.
If you make more money than you need to pay your bills, you should not file for personal bankruptcy. Bankruptcy may seem to be the easy way out, but your credit report will show the scar for the next ten years.
You can still take out a car loan or mortgage while you are in Chapter 13 bankruptcy. However, there are steps which must be taken to ensure you are within the law of bankruptcy. Your bankruptcy custodian will need to approve the loan. You need to show them why and how you can handle paying back the new loan. Be ready to justify the purchase that you need the loan for, too.
If you are forced to file for bankruptcy, you should avoid being ashamed of yourself. The bankruptcy process can make many people feel ashamed, guilty and unworthy. Feeling like this will not help your situation and can actually do serious damage to your mental well-being. If you want to cope with your bankruptcy filing successfully, you must maintain a positive point of view.
If you are planning to file bankruptcy, avoid taking large cash advances from credit cards thinking that the debt will be erased. Not only is this fraud, but you could still be liable to repay the money at the end of the day.
Don’t put off handling the research or procedures for the bankruptcy process if that is the route you’re taking. While it may be difficult to accept that you are in trouble, waiting only prolongs the agony. By talking to a professional, as soon as possible, they can give you some advice on things you can do before it all gets too complicated.
If you find it necessary to file bankruptcy, hire a bankruptcy attorney. The complexities of the process of filing, court proceedings and other issues can best be handled by a competent lawyer. Your lawyer will take care of the paperwork and help you understand what this process means for you.
With time, things will get better credit-wise for you, despite your having previously filed for bankruptcy. By becoming financially responsible post-bankruptcy, you’ll be showing lenders that you’re serious about reestablishing your credit worthiness. Keep adding to your savings and you may be pleasantly surprised when you next seek a auto or home loan.
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