A lot of people are in debt right now. The bills keep adding up and it is never a friendly voice on the other line when the phone rings. If this sounds like you and your situation, filing for bankruptcy may be a good idea for you. Keep reading to see if this is a viable solution for you.
It is simple math; when you owe more than you are able to pay off, a bankruptcy is the likely solution. When you are faced with this issue, begin to familiarize yourself with your state’s laws. Each state has its own set of rules regarding bankruptcy. For instance, your home might be protected in some states while you might lose it in others. You should be aware of local bankruptcy laws before filing.
Exhaust every other option before making the decision to file for personal bankruptcy. There are other options available, such as credit counseling for consumers. Be certain that bankruptcy is the only option you have before pursuing this course because bankruptcy is always evident on your financial and credit history.
Do not hesitate to remind your lawyer of any details regarding your case. Many times a lawyer may forget a key detail; therefore, it is important to remind your lawyer of any key information. Do not hesitate to speak up; this is your hearing and your future is on the line.
After a bankruptcy, you may not be able to receive any credit cards. Secured cards can be a great way to get started if this happens to you. This will allow you to start building a good credit history while minimizing the bank’s risk. Once you’ve built up a history of on-time payments, you may start getting unsecured credit again.
Before making your decision to file for bankruptcy, double-check to see if other, less drastic options could make sense. For example, you may want to consider a credit counseling plan if you have small debts. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Chapter 7
There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Make sure you know what each entails so you can make the right choice. The Chapter 7 variety can help you eliminate your debts almost entirely. All of your financial ties to the people you owe money to will disappear. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. Look into both types of bankruptcy before deciding which one would suit your particular needs.
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. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. Taking the time to compare lawyers will ensure that you get a person that you can be yourself around.
It is possible to keep your home. Filing for bankruptcy does not always mean you will end up 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. Otherwise, try looking into house exemptions that may let you remain in the home if you meet certain financial threshold requirements.
Being with the people who you love should be still be a top priority. Filing for bankruptcy, and all that comes with it, can be hard to handle at times. It is long, stressful and makes people feel like losers. A lot of people hide away until the entire proceedings have been played out. You shouldn’t do this, though, as staying away from the world can amplify any emotional issue you are having, and they could even morph into full-blown clinical depression. Thus, you must keep living your life and socializing with those you love, no matter what is going on with your bankruptcy.
Don’t file bankruptcy if you can afford to pay your debts. Sure, bankruptcy can get rid of that debt, but it comes at the price of poor credit for 7-10 years.
Rest assured, when you file for Chapter 13 bankruptcy, you still have the ability to take out mortgage and car loans. There are extra hoops to jump through. You need to speak with your trustee so that you can be approved for a new loan. You need to develop a budget and show that you will be able to afford the new payment. You also need to be prepared to answer questions about your need for the new item.
You should now understand that there is more than one path to take when it comes to bankruptcy. If you open your mind to this process and think clearly, it can lead to better financial situation and leave you in a much better position than before.
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