Is is often hard to live with bankruptcy. If you are saddled with financial hardship, it may seem that you have few alternatives. However, there are some things that can be done to get what you want.
Bankruptcy Laws
Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If this sounds familiar, you should read up on the bankruptcy laws in your state. Different states have different laws regarding bankruptcy. For instance, in some states you can keep your home and car, while other states prohibit this. You should be aware of local bankruptcy laws before filing.
It is important that you increase your knowledge on personal bankruptcy by reviewing websites that provide reliable information. The United States There is solid advice available from the NACBA, (Consumer Bankruptcy Attorneys’ association) the ABI, (American Bankruptcy Institute) and the United States Department of Justice. The more you know, the better equipped you’ll be to make the wise decisions needed for a successful bankruptcy.
Always be honest and forthright when it comes to your bankruptcy petition. Do not try to shield some assets or income from your creditors. This can get you in serious trouble and prevent your bankruptcy petition altogether.
You should not have to pay for an initial legal consultation, and such meetings are great opportunities to ask lots of questions. Most lawyers offer free consultations, so talk to a few before making your decision. Only choose a lawyer if you feel like your questions were answered. Take your time choosing the right attorney to assist in your bankruptcy. So, this gives you plenty of time to consult with several attorneys.
Check into less drastic solutions prior to declaring bankruptcy. For example, consumer credit counseling programs can help if your debt isn’t too large. You may also find people will allow you to make lower payments. If that happens, get records of the debt modifications.
Chapter 7
Be sure you know how Chapter 7 and Chapter 13 differ. Chapter 7 involves the elimination of all of your debt. All creditor relationships will be severed. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. It’s important to know what differences come with every type of bankruptcy. This will let you find out what’s best for you.
Do not forget to make quality time for friends and family members. Filing for bankruptcy is a difficult process. The long process can leave people stressed out and racked with guilt and shame over having their financial affairs laid out for everyone to see. A lot of people become depressed and withdrawn until their bankruptcy is discharged. Pulling away from people who care for you will not help the situation, and can cause your negative feelings to intensify. For this reason, if you are undergoing personal bankruptcy proceedings, you must continue to live a normal life, spending time with your friends and relations.
Interest Rates
Before ultimately deciding whether or not to file for bankruptcy, be sure to weigh the different options available to you. You can get your interest rates reduced or enter into a debt repayment plan. Before you file bankruptcy, ask your attorney if any of these are viable alternatives for you. Various loan plans out there can be a lifesaver if you’re facing a foreclosure. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. When push comes to shove, creditors want their money, and they are willing to make concessions to get it and prevent the debtor from declaring bankruptcy.
Carefully consider filing for bankruptcy on loans that have a co-signer, especially if that co-signer is a business associate, close friend or relative. Debts which you shared with another will not be your responsibility any longer if you file for personal bankruptcy under Chapter 7. However, creditors can demand co-debtors pay the amount in full.
Know your rights when filing for bankruptcy. Occasionally, debt collectors will attempt to convince you that your debt isn’t eligible for bankruptcy. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If a collector uses this tactic about debt that can, in fact, be discharged through bankruptcy, report the collection agency to the attorney general’s office in your state.
It does not take much experience with bankruptcy to understand that the entire process can be extremely stressful. In order to keep things together and protect yourself from excess stress, be sure to hire a competent attorney. Do not solely use cost to determine whom to hire. You do need someone who is costly, just someone who is good at what they do. Get referred from others who’ve been in the same situation, check the BBB, and interview several people through free consultations. It is even possible to watch a court hearing in order to see how well an attorney handles a case.
If you are thinking about filing for bankruptcy, one of the first things you should do is look into the laws of your state. There are many pitfalls you can easily fall into, such as transferring away assets to prevent them from being included in the filing. Also, it is against the law for a person to acquire more debt on their credit card prior to filing.
Even when filing for bankruptcy you should now be aware that this should not put a damper on your life. Get on track and stay there to show lenders your positive new efforts. Make an effort to keep your debts under control, and try for another loan when the time is right.
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