Bankruptcy is a huge financial decision and should not be lightly considered. Use this article’s advice to learn what you are in for and how to make proper choices. Research the topic extensively in advance.
The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. If this applies to you, be sure that you know what the laws of your state are. Each state has its own set of rules regarding bankruptcy. Your home is safe in some states, but in others it’s not. It is best to become familiar with your state’s laws regarding bankruptcy before you take the steps to file.
It’s important that you understand what bankruptcy is and how it will change your life before you attempt to file a claim. The United States Department of Justice and National Association for Consumer Bankruptcy Attorneys provide excellent information. The more you know about it, the better you are able to make the best decision for your situation and to make sure that the bankruptcy proceedings move forward with minimal setbacks.
Don’t be reluctant to remind your lawyer about specific details he may not remember. Don’t assume that they will recall every detail that you go over with them without a friendly reminder. Don’t be afraid to speak up, as it is your case and your future will be affected by its outcome.
Prior to filing for bankruptcy, discover which assets cannot be seized. The Bankruptcy Code includes a list of the types of assets that are exempt from the bankruptcy process. 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. It is important to know what types of possessions may be taken away before they actually are seized.
Chapter 7
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Under Chapter 7 type bankruptcy, all debts are forgiven. The ties with the creditor will be broken. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. You have to know what differs between all of the kind of bankruptcy, so you know which is one is ideal for you.
Your most important concern is to protect your home. Filing for bankruptcy will not always result in losing your home. You might be able to keep your home, for instance, if you have two mortgages or if your home has lost its value. Check to see if you pass the requirements necessary to file for a homestead exemption.
Chapter 13
Consider Chapter 13 bankruptcy, if you chose to file. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
Think about all your options before pulling the trigger. There are many other options including debt consolidation and making payment plans with your creditors. If foreclosure looms, think about getting your loan plan modified. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. At the end of the day, creditors want to get paid, and sometimes a debt repayment plan is preferable to dealing with a bankrupt debtor.
It is in your best interest to be abreast of your rights in petitions for bankruptcy. Many creditors or bill collectors might tell you your debts cannot be included in a bankruptcy. There are few debts that can’t be discharged. If you are told by a debt collector that your debts are not dischargeable, make a record of your conversation and report the individual to the proper state authorities.
Be decisive at the correct moment in time. Timing can be critical when it comes to personal bankruptcy cases. In some cases, it is better to file immediately, while other situations benefit from trying to get certain finances in better shape before filing. Discuss your specific situation with a bankruptcy lawyer to find out when would be your best time to file.
Don’t drag your feet figuring out if bankruptcy is the right thing to do. It can be hard to ask for help but it’s not recommended for you to get further into debt. By consulting a professional, you will be able to get the advice that you need before everything gets too complicated.
Lots of people who file for bankruptcy say they will never use credit cards again. This may not be such a great idea because you still need credit to to help build better credit. You will not be able to get your credit back to a respectable score if you don’t use credit. Keep it simple with one card and take a slow approach to rebuilding.
As you’ve read, bankruptcy isn’t as simple as it might sound. Many steps have to be taken, and all of them must be performed properly. If you apply this advice, you are certain to be prepared when bankruptcy rears its ugly head.
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