The economy is bad looking these days. When the economy is bad, people lose their jobs and that means debt begins to pile up. Rising personal debt leads, in many cases, to increased bankruptcy filings. If you, a friend, or a loved one is in financial trouble, this article could help decide if bankruptcy is the right option.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Unless there are no other options, your retirement funds should never be touched. Although you may need to tap into your savings, you should not use up all of it right now and jeopardize the financial security of your future.
The two main kinds of bankruptcy are Chapter 7 and Chapter 13. Make sure you understand them so you know what is best for you. The Chapter 7 variety can help you eliminate your debts almost entirely. All the things that tie you to creditors will go away. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. 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.
Personal Bankruptcy
You should weigh every option before thinking about bankruptcy. Some alternatives to filing for personal bankruptcy include debt repayment plans, interest rate reduction plans, and debt consolidation. Talk with the personal bankruptcy lawyer to find out more. Loan modification plans can help if you are dealing with foreclosure. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. Most creditors will be willing to work out an option to avoid not getting paid at all.
If you meet certain requirements, you may be able to get a lower monthly payment on your financed vehicle. Chapter 7 usually can help payments be lowered. There are a few requirements that you have to meet to be eligible, though. You have to have bought the car more than 2.5 years ago, your loan’s interest rate needs to be over a certain amount, and your employment history has to be good.
Be sure you’re acting when the time is right. Proper timing is important, especially when it comes to personal bankruptcy. There are occasions where it pays to delay and others where a quick decision is the best option. Speak with a bankruptcy lawyer about when the best time is to file for your specific needs.
It is important to not wait for the final minute to petition for bankruptcy. Some people think that by ignoring financial problems, they will just disappear. This kind of thinking could prove to be a mistake. Debt can become a big problem rapidly, and if you fail to handle it, you can face foreclosure or garnishment of wages. As soon as you’ve decided that you no longer have a handle on your debts, consult a bankruptcy lawyer to see if bankruptcy is right for you.
See to it that you are aware of the laws concerning bankruptcy before you consider filing. Did you know that in some areas, you cannot transfer assets from yourself to another person in the year previous to filing occurring? Also, it is against the law for a person to acquire more debt on their credit card prior to filing.
Do not hesitate or stall when determining if filing for bankruptcy is the correct choice for your life and situation. Yes, it is hard to admit that you need help; however, the longer you wait the deeper in debt you get. The time to seek out professional advice on bankruptcy is as early as possible. Your financial situation will get complex very quickly, so wise counsel is more valuable the earlier you get it.
You should immediately vow to be more financially responsible before you actually file for bankruptcy. Do not increase current debt or incur new debt prior to bankruptcy. Creditors and even judges look at your current and past history when they are going through your bankruptcy paperwork. Your current spending behavior should show that you are making a real effort to modify your financial habits.
Rethink a divorce when in a tough spot with finances. Divorcing will only complicate your financial situation. You may find that both you and your spouse must file for bankruptcy following divorce. Making sure that divorce is a good option is best.
Some lawyers have a phone service creditors can call instead of you. All you have to do is give the number for the attorney’s office, which allows them to confirm the validity of your bankruptcy. This can stop collectors from harassing you at home.
Remember to check for accuracy. Despite having an attorney, you alone are still responsible for the contents of the paperwork. Although bankruptcy attorneys have legal expertise, they also have plenty of cases to deal with. It is definitely not impossible for them to make mistakes. Therefore, you should double-check all of their forms and ask questions about anything that seems off to you.
While the economy may be improving somewhat, lots of people remain unemployed and in financial turmoil. Even long-term job loss does not inevitably have to result in bankruptcy. You hopefully have more knowledge now on how you can avoid bankruptcy. Good luck to you.
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