Debt has become a problem for many people facing this tough economy. The hate answering the phone because many debt collectors call daily, and every trip to the mailbox means another stressful bill. If you are having financial difficulty, it is a good idea to research all your options, including bankruptcy. The bankruptcy laws vary in each state, so educate yourself on the laws in your state.
When bankruptcy seem inevitable it is important not to use your retirement funds or emergency savings to pay creditors. Avoid touching your retirement accounts whenever possible. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
Be sure to bring anything up repeatedly if you are unsure if your lawyer is focusing on it. Chances are that you may have forgotten to tell them about certain specifics that may be important to your filing. This is your bankruptcy case, so do not be afraid to remind your lawyer of any key facts.
Personal Bankruptcy
Be sure to hire an attorney before you embark upon filing for personal bankruptcy. You might not understand all of the various aspects to filing for bankruptcy. A personal bankruptcy lawyer will be able to help you and ensure you are doing things the proper way.
Be sure you know how Chapter 7 and Chapter 13 differ. Chapter 7 involves the elimination of all of your debt. The ties with the creditor will be broken. Bankruptcy under the rules of Chapter 13, on the other hand, require you to work out a payment arrangement to pay back the agreed upon amounts. You must know about the different bankruptcy types, and how each can affect you.
Talk to a lot of different bankruptcy lawyers; most of them will give you a free consultation. Be certain that the person you meet with is really a lawyer. Avoid meeting with paralegals or legal assistants because they cannot give you legal advice. Seeking out different attorneys is all part of the process until you find someone that you can trust.
Protect your house. Losing your home is thought of as common in bankruptcy cases, but it is by no means inevitable. If your home value has gone down, or if there’s a second mortgage, you might be able to keep it. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
Chapter 13
Research Chapter 13 bankruptcy, and see if it might be right for you. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. This allows you to keep possession of your real estate and property and repay your debt through a debt plan. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
Do not let bankruptcy consume you, make sure you make time for your friends and family. The process for bankruptcy can be hard. It takes a long time, it can be stressful, and people feel unworthy, guilty and ashamed. Lots of people decide they should hide from everyone else until it is all over. Do not isolate yourself or you will put yourself at risk for depression. Because of this, you need to make sure you spend as much time as you can with your family and friends, even if you are ashamed of your finances.
Filing for bankruptcy should not be done on a whim. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. You can apply for a modification of your mortgage if your home is going into foreclosure. This type of plan allows your lender to work with you eliminating charges, extending your loan, and lowering interest rates to help you pay back the loan without drowning in debt. Because of the fact that creditors would like to see their money they are likely to offer repayment plans versus not getting paid at all if you file for bankruptcy.
If you have reached a point where you are forced to file bankruptcy, you can now understand that many resources are available to help you. When you handle it correctly, a bankruptcy can resolve a great number of your financial troubles and enable you to start turning your life around.
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