Deciding to file for personal bankruptcy is a major life decision, and should not be jumped into lightly. Read this article to find out more about personal bankruptcy and get the information you need to make an educated decision. Learn everything you can prior to doing anything.
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. Chapter 7 eliminates all debts. You will no longer be liable for any money that you owe to your creditors. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. You must know about the different bankruptcy types, and how each can affect you.
Most bankruptcy lawyers offer a free consultation, so meet with several before you decide on one. Make sure that you meet with an actual lawyer and not an assistant or paralegal, as these people are not allowed to provide legal advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
Chapter 13 Bankruptcy
Consider Chapter 13 bankruptcy, if you chose to file. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. This repayment period usually lasts from three to five years. If you make your payments faithfully during that time, any remaining unsecured debt will be eliminated. Just know that missing one payment could cause your case to be dismissed.
Investigate other alternatives before resorting to bankruptcy. Find out if you can receive a reduced interest rate or altered repayment plan instead of bankruptcy filing. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. The lender wants their money, so they may be willing to forgive some fees, change the loan term or reduce interest as ways of assisting you. After all is said and done, your creditors will still want their money. For this reason, you may wish to investigate debt repayment programs in lieu of bankruptcy programs.
Never forget that you still deserve to enjoy life while you go through the bankruptcy process. The process of filing for bankruptcy can make people a nervous wreck. If you let the stress get to you you may get depressed if you’re not doing the proper things to fight it. Your life will see improvement after you get past the bankruptcy.
Chapter 7 Bankruptcy
Think about any co-debtors you have prior to filing for Chapter 7 bankruptcy. A Chapter 7 bankruptcy will relieve you of your legal responsibility to pay any joint debts. However, creditors will want to hold your co-signer responsible completely.
Even if you are involved with Chapter 13 bankruptcy, it is still possible to get a mortgage or an automobile loan. However, it can be more difficult. Normally, the trustee assigned to your bankruptcy must approve any new loan. You will need to make a budget and prove that you will be able to afford your new loan payments. You will need to be able to explain why the purchase is necessary.
It is important to understand your rights when you file for bankruptcy. Some bill collectors will tell you that your debts can’t be bankrupted. You should know that only a few debts cannot be erased, including student loans and child support. If you are unsure about specific types of debt, check the bankruptcy laws in your state or consult an attorney.
File for bankruptcy before your finances get completely out of control. Often, people try to act like they are not in financial straits. They imagine the issues will blow away, but they do not. Debts can multiply very quickly, and can result in you losing money to wage garnishment, or even losing assets that are part of a secured loan. When you make the connection that your debt level is too high, contact an attorney that specializes in bankruptcy as soon as possible, to see what can be done.
Bankruptcy is not a chance happening in anyone’s life. Bankruptcy is complex and requires you to think carefully. By using the tips in this article, you will be able to successfully file for bankruptcy and begin to rebuild your life.
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