Going through bankruptcy is a stressful experience. If you are saddled with financial hardship, it may seem that you have few alternatives. Even if your credit score isn’t good, you may still find that there are ways to get a home loan or a car.
The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. If you find yourself needing to file for bankruptcy it is important to familiarize yourself with the state laws. Laws differ from one state to the other. Some states may protect you home, and some may not. Be aware of bankruptcy laws before filing your claim.
Make sure that you understand everything you can about personal bankruptcy by visiting websites that offer information. The US Department of Justice, the American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys, all provide valuable information. The more you know about it, the better you are able to make the best decision for your situation and to make sure that the bankruptcy proceedings move forward with minimal setbacks.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Unless there are no other options, your retirement funds should never be touched. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.
Final Decision
When you do meet with a lawyer make sure that they answer all of your questions and that they do not charge you for consultation alone. The majority of lawyers offer their first consult at no cost, so ensure you meet with several to find one that you like. You should make a final decision only once all of the questions or concerns are sufficiently attended to. It is not necessary to make a final decision right away. That gives you the chance to speak to a number of lawyers.
Find a specialized lawyer if you are thinking about filing for bankruptcy. Bankruptcy is a complex process, and you probably don’t know all the information that is required to navigate it. A qualified bankruptcy attorney can guide you through the filing process.
Be aware of recent changes, if any, in the bankruptcy code. It can be tough to keep up with them on your own, and because they change often, a bankruptcy attorney can help you keep track for the sake of your filing process. To learn about the changes, you should check out the website of your state’s legislation or you can call their office.
Many bankruptcy lawyers offer free consultations, so go to several before choosing one. Make sure you meet with a licensed attorney rather than a paralegal or assistant, because it is illegal for these people to give legal advice. Taking the time to compare lawyers will ensure that you get a person that you can be yourself around.
Don’t file bankruptcy if you can afford to pay your debts. It can seem like bankruptcy can be an easy way to avoid paying back your debts, however it leaves a serious mark in your credit report that can last between seven and ten years.
If you really want to keep your vehicle, speak with your lawyer about possible choices. Lower payments can sometimes be structured into a Chapter 7 solution. If you meet the criteria specific to your state, it may be a good option to consider.
Chapter 7
Before you decide to file for Chapter 7 bankruptcy, you should consider what your bankruptcy might have on others, as your family and friends may be affected. You can relieve yourself of any liability for debts that you may share with someone else through a Chapter 7 filing. However, anyone sharing the loan with you may be forced to pay back the entire amount for the amount in full, which spell financial disaster for them.
Consider all of your options before filing for bankruptcy. Consider credit counseling. There are even non-profit companies that may be able to help you. These organizations can work with creditors to lower your payments and interest rates. You’ll make your payments to the company, and the company will pay off your creditors.
Don’t put off handling the research or procedures for the bankruptcy process if that is the route you’re taking. It can be hard to ask for help but it’s not recommended for you to get further into debt. Making use of a bankruptcy pro immediately can make the difference in success and failure in bankruptcy court.
You do not lose everything that you own when you decide to declare bankruptcy. Personal property can be kept. This covers items such as clothing, jewelry, electronics and household furnishings. This will depend on your state’s laws, the type of bankruptcy you file for, and your financial situation, but you may be able to retain large assets like your home and car.
Chapter 13
If you cannot qualify for a Homestead Exemption when filing for Chapter 7 bankruptcy, it is possible you might also be able to do Chapter 13 too, simply for your mortgage. Sometimes, the best course of action may be to simply re-file your case as a Chapter 13 bankruptcy. Talk to your lawyer to determine if this is true in your case.
No matter if you’ve filed for bankruptcy, this will not forever limit your life. If you don’t spend frivolously and repay lenders faithfully, lenders will be more willing to lend to you in the future. So implement a savings program, and watch how much it helps you when you need to apply for a home or car loan.
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