There are many valid reasons for filing bankruptcy. Situations like a job loss or a divorce can bring you to a situation where the only solution is bankruptcy. Read this article to learn more about bankruptcy and find out if filing is the best option for you.
Millions of Americans file for bankruptcy each year because they can not pay their bills. If this sounds familiar, you should read up on the bankruptcy laws in your state. Every state has a separate law having to do with bankruptcy. In a few states, they see to it that your house is protected. This is not the case when it comes to other states. Become acquainted with local bankruptcy laws before filing.
You might experience trouble with getting unsecured credit after filing for bankruptcy. If this happens to you, think about applying for a couple of secured credit cards. This will be a demonstration of the seriousness with which you view rebuilding your credit rating. Once creditors see that you are making an effort to restore your credit, they may allow you to get an unsecured card in the future.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. To find an itemized list detailing assets exempt from bankruptcy, find the Bankruptcy Code. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. This will ensure that you do not have any surprises once you have filed bankruptcy.
If you are considering filing for bankruptcy you definitely need to hire an attorney. Personal bankruptcies are detailed and complex processes, and you may miss something that costs you money. A qualified bankruptcy attorney can guide you through the filing process.
Consider other alternatives before filing for bankruptcy. You could find relief from small debts by using a consumer credit counselor. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.
Chapter 7
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves the elimination of all of your debt. This includes creditors and your relationship with them will become no longer existent. 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. When choosing the type of personal bankruptcy that is correct for you, it is very important that you know the differences.
Before filing for bankruptcy ensure that the need is there. Perhaps consolidating your existing debt can make it easier to manage. Declaring bankruptcy is a very involved process that can cause a good deal of anxiety. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. So, consider bankruptcy only as a last resort when you have no other choice.
Consider Chapter 13 bankruptcy. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. 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.
If you’ve already tried everything you can think of to dig out of your financial mess, it might be time for bankruptcy. Because circumstance can create financial issues that result in bankruptcy, you can rest easy. Valuable information is awaiting your attention within the following paragraphs.
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