Many people find themselves feeling unworthy, depressed or frightened when going through bankruptcy. People who experience this process are always worrying about how to take care of their debts. However, bankruptcy isn’t a process that will forever hurt your future.
The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. If you find yourself going through this, you should know all about the laws that are in your state. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
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. Retirement funds should be avoided at all costs. 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.
Unsecured Credit
Once the bankruptcy is complete, you may find it difficult to receive unsecured credit. If so, apply for a secured credit card. That will show lenders that you are committed to rebuilding your credit. After a time, you are going to be able to have unsecured credit cards too.
Before you file for bankruptcy, find out which of your assets will be exempt from seizure. The federal statutes covering bankruptcy can tell you exactly which assets are exempt from forfeiture to pay off creditors. It is important that you read this list before filing for bankruptcy, so that can find out whether or not your most prized possessions will be seized. Without reading the list, you may be shocked at which possessions can be taken from you.
Be completely honest whenever you file for personal bankruptcy. Hiding any asset or liability is a risk that will bite you in the end. When you file make sure whoever is handling the process is fully aware of each and every financial detail. Do not leave anything out and come up with smart plan to manage the situation you are dealing with.
You should never pay for your first consultation with a bankruptcy attorney. Make the most of this free consultation by asking lots of questions. Most lawyers offer free consultations, so talk to a few before making your decision. Don’t hire an attorney who fails to address all your concerns and questions. It is not necessary to make a final decision right away. This offers you the opportunity to speak with other attorneys.
Before you file for personal bankruptcy, be sure that you are cognizant of all current laws. Bankruptcy laws are always changing, and you need to be aware of any changes so your bankruptcy can be properly filed. Check the website of your state’s legislation or get in contact with your local office to learn more about these important changes.
Chapter 7
Know the differences between Chapter 7 and Chapter 13 bankruptcy. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. All the things that tie you to creditors will go away. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. Look into both types of bankruptcy before deciding which one would suit your particular needs.
By now, you should be able to see that personal bankruptcy does not leave you doomed. Although it is hard at first, you will get through it. Using these tips will allow you to get through this process with ease.
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