In order to file a bankruptcy claim, you will run into more than a couple of complicated hurdles to jump. For example, there are several types of bankruptcies. Each type depends on several factors including your income as well as your debts. It is important to learn about personal bankruptcy before you make the decision to file. The below advice can assist you in beginning.
Become Familiar
Individuals often seek to file for personal bankruptcy protection if their debts exceed their ability to repay them. If this describes your situation, it makes sense to become familiar with relevant laws. Every state is different when it comes to dealing with bankruptcy. Some states may protect you home, and some may not. It is best to become familiar with your state’s laws regarding bankruptcy before you take the steps to file.
You can find a wealth of information concerning personal bankruptcy by searching for websites which offer information about it. The United States Department of Justice and National Association for Consumer Bankruptcy Attorneys provide excellent information. By having more knowledge, you can make the right decision, as well as be sure you are ensuring that your personal bankruptcy case goes smoothly.
Be certain you are making the right choice before you file for bankruptcy. Look into other options, such as consumer credit counseling. Your credit score will be forever effected by bankruptcy, which is why you should do everything else in your power to resolve matters first.
As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. No matter what you do, do not touch your personal savings unless there is no other option. You may have withdraw from your savings every now and then, but try to leave yourself some financial security for the future.
Never lie about anything in your bankruptcy petition. Resisting the temptation to hide income or valuable assets from the bankruptcy trustee is a smart way to avoid potential complications, penalties, and the possibility of being barred from re-filing in the future.
Prior to filing your bankruptcy petition, go over the list of assets that cannot be seized by creditors. Certain assets, as listed in the local bankruptcy regulations, are immune from seizure during bankruptcy. Many belongings may become eligible for repossession or seizure after filing for bankruptcy. Without reading the list, you may be shocked at which possessions can be taken from you.
Chapter 7
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. The Chapter 7 variety can help you eliminate your debts almost entirely. Your responsibilities to your creditors will be satisfied. 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 crucial that you know the differences between all of the various kinds of bankruptcies so that you may choose the best option for your situation.
A lot of bankruptcy attorneys will let you have a consultation, so try several out. 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. Taking the time to compare lawyers will ensure that you get a person that you can be yourself around.
Research Chapter 13 bankruptcy, and see if it might be right for you. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. Typically, any plan you develop will last around 3-5 years. Afterwards, any remaining unsecured debts will be discharged. Missing a payment under these plans can result in total dismissal by the courts.
After you have filed for bankruptcy, enjoy your life. It can be several months between the initial filing and the final discharge of debts. That stress can cause depression, if you don’t take care to avoid it. Life will get better; you just need to make it through the bankruptcy process.
Know your rights when filing for bankruptcy. Some debtors will try to tell you your debt with them can not be bankrupted. There are not many debts that can not be bankrupted, student loans and child support for example. If the bill collector is trying to deceive you, then report that company to your local attorney general’s office.
Forget about detrimental terms, such as shame, when you are filing for personal bankruptcy. Feelings of low self-worth, shame and guilt are common for those who have come to the point where bankruptcy is their only option. These are useless emotions, however, and can be harmful to your mental state. Maintaining a positive outlook during a troublesome financial upheaval is the best way to cope with bankruptcy.
Now you know that filing for bankruptcy requires a lot of thought. If you decide bankruptcy is right for you, take the proper precautions. This could be a new beginning and a clean slate for you.
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