With the state of the economy, job market, and stock market, bankruptcy has become more and more common. The general state of the economy is at least partially to blame. You need to educate yourself so that you can make wise decisions when it comes to filing bankruptcy. Read this article to learn more about bankruptcy.
When it gets time to think about bankruptcy, avoid using your retirement or savings to pay off the creditors or even make attempts to settle the debt. Don’t touch retirement accounts unless you don’t have a choice. 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.
Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. You can lose the right to file bankruptcy now or in the future if you try to withhold information about your assets and income. So it is critical that you disclose everything honestly to to avoid that and any other penalties the trustee might impose if he discovered your attempt to hide information from the court.
Research what assets are exempt from seizure before you decide to declare bankruptcy. The Bankruptcy Code lists the kinds of assets which are exempted when it comes to the bankruptcy process. You need to compare this list to the assets you own so that you are not surprised when certain assets are seized. This will ensure that you do not have any surprises once you have filed bankruptcy.
Chapter 7
Be sure you know how Chapter 7 and Chapter 13 differ. If Chapter 7 is what you file, your debts will get eliminated entirely. Your ties with all creditors will get dissolved. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
Safeguard your home. You do not have to lose your home in the process of a bankruptcy. It is entirely possible that you will be able to keep your home. This is dependent upon the your home’s value and whether or not you have taken a second mortgage. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
Don’t file for bankruptcy if it is not completely necessary. It might be possible to consolidate some of your debt instead. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. Your future credit will be affected by these actions. This is why it is crucial that you explore your other debt relief options first.
Do not let bankruptcy consume you, make sure you make time for your friends and family. Going through a bankruptcy can be an excruciating experience. It is long, full of stress and leaves individuals having feelings of shame and guilt. Lots of people think they need to hide from everyone until this is all done. However, self imposed isolation will only make you feel even worse about the process and could even lead to depression. 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.
If you can afford to pay your bills, bankruptcy is not a wise option. Bankruptcy may seem to be the easy way out, but your credit report will show the scar for the next ten years.
It is important to understand your rights when you file for bankruptcy. Certain unscrupulous creditors will try to convince you that certain debts can’t be discharged in bankruptcy. You should know that only a few debts cannot be erased, including student loans and child support. If you are told by a debt collector that your debts are not dischargeable, make a record of your conversation and report the individual to the proper state authorities.
Be certain to be transparent about all of your financial information when the filing of for personal bankruptcy. If the court thinks you are attempting to conceal information, your petition could be denied. Even if you think a sum is insignificant, add it into your documentation. Include all jobs, assets and loans.
Credit Counseling
Consider any other options available before filing for personal bankruptcy. Consider credit counseling. You can get the help you need from a variety of non-profit credit counseling companies. These companies lower your interest and payments by working with your creditors. You pay the organization, and they pay creditors for you.
Avoid large cash advances from credit cards when considering bankruptcy. You may think these debts will just be washed clean, but you are wrong. This is fraud, and you will be required to pay that money back.
Before you file, make the choice to be fiscally reliable. It is especially important to refrain from taking on any new debt before filing. Judges as well as creditors will consider you current and past history when they’re adjudicating personal bankruptcy. Your current spending behavior should show that you are making a real effort to modify your financial habits.
As you learned from the introduction of the article, bankruptcy is growing a lot these days, especially since the economy is slowly rebuilding. So, use what you learned today so that you know what decisions to make while you contemplate filing for bankruptcy.
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