Just thinking about bankruptcy can make people fearful. Growing debt, along with insufficient income to support a family, can make life seem unbearable. Does the thought of this scare you? Perhaps you are going through it right now, and the advice found here can help your situation.
A lot of people find themselves needing to file bankruptcy when they are unable to pay their bills. If this is your case, you should do some research about bankruptcy laws in your state. Every state is different when it comes to dealing with bankruptcy. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. Become acquainted with local bankruptcy laws before filing.
Before you proceed with your personal bankruptcy case, review your decisions to be certain that the choice you are making is the right. It is possible to take advantage of other options, like consumer credit counseling. Your credit score will be forever effected by bankruptcy, which is why you should do everything else in your power to resolve matters first.
Consider other alternatives before filing for bankruptcy. For example, consumer credit counseling services can often help you figure out a workable repayment plan with creditors. You may have luck negotiating lower payments by dealing directly with creditors, but be sure to document any get and new agreement terms in writing from each creditor.
Chapter 7
You may have heard bankruptcy referred to differently, either as Chapter 7 or Chapter 13. Learn the differences between the two before filing. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. Any debts that you owe to creditors will be wiped clean. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Since the majority of attorneys are willing to provide no-cost initial consultations, it is smart to meet with more than one before you make a selection. Be certain you talk to the lawyer, himself, instead of a paralegal or assistant; those people aren’t allowed to give legal advice. Interviewing multiple attorneys is a good way to find the best fit.
Do what you can to keep your home. There are many options available to help protect you from losing your home. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. If you meet certain criteria, you may be able to retain ownership of your home even after filing for bankruptcy.
If your earnings are higher than your expenses then filing for bankruptcy is a waste of time and money. 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.
After you have filed for bankruptcy, enjoy your life. Many debtors stress-out during the time of filing. Make sure you take care of your part and let your attorney do the rest. Once your petition is in the hands of the judge, all you can do is wait.
Filing bankruptcy under Chapter 13 means you can still get a loan for a car or a mortgage. It is just tougher. Your trustee can help you acquire a new loan. When you meet with your trustee or financial adviser, make sure that you come up with a sound budget proposal. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
It’s normal for people to be scared of bankruptcy, since it really is a frightening process. Now that you have read this article, you now never again have to be scared of bankruptcy. By using the tips and information you’ve gathered here, you will be able to face your fear head on and look forward to a brighter financial future.
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