Making the decision to file for bankruptcy isn’t an easy one, but sometimes it can be the only way out of a mountain of debt. Going through this ordeal is easier when equipped with lots of solid advice. Keep reading to learn some valuable tips from someone who has stood in your shoes.
Before making the decision to file for bankruptcy, be sure to do some research and learn all you can about the subject. There are many websites available that offer this information. The United States DOJ, along with a number of other bankruptcy institutes and attorneys specializing in bankruptcy can give you invaluable information. You will find that the process of filing for personal bankruptcy is easier and less of a hassle with the more information on the subject you gather ahead of time.
The best way to build your credit up after a bankruptcy is making all your payments on time. If so, apply for a secured credit card. By doing this, you will be letting people know that you want to fix your credit score. When you have done well with secured cards for a while, you should be able to obtain an unsecured credit card.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. When you file make sure whoever is handling the process is fully aware of each and every financial detail. Keeping secrets or trying to outsmart everyone is not a wise move.
Chapter 13 Bankruptcy
Consider Chapter 13 bankruptcy for your filing. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. This type of bankruptcy protects your assets from seizure and lets you repay your credits over the course of a few years. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
If you filed for Chapter 13 bankruptcy, you can still get a mortgage or a car loan. However, it can be more difficult. Your trustee can help you acquire a new loan. To show that you are responsible and prepared for the undertaking of a new loan, flesh out a full budget. The odds are also good that you will be asked exactly why you’re purchasing a new item. Make sure you have a good reason.
Decide right up front that you are not going to feel embarrassed or ashamed about needing to file bankruptcy. A lot of people have a negative opinion of bankruptcy, mostly because they misunderstand this procedure. Feeling like this will not help your situation and can actually do serious damage to your mental well-being. These difficult financial times can easily take their toll on anyone. One of the best ways to cope with the situation is to maintain a positive attitude.
If you are going to file for bankruptcy make sure you are prompt. It is a big mistake to avoid financial problems, thinking they may go away on their own. If you have failed to make payments for several months but have continued making purchases on credit, your petition may be denied. Once you realize that the debt you have is too much for you to handle, start thinking about talking to a bankruptcy attorney, they can guide you throughout the entire process.
Prior to filing, it is important that you know all about bankruptcy laws. For instance, it’s prohibited for an individual to transfer assets to someone else a year before filing for bankruptcy. It is also illegal for someone who files for bankruptcy to drastically increase their debts on credit cards immediately before filing.
Credit Counseling
Take a look at all of your financial options before filing for personal bankruptcy. Have you been through credit counseling first? May non-profit companies are available to help you. They will work with your creditors to get your payments lowered and your interest lowered as wll. The payments you make go to the credit counseling company, and they send that money to your creditors.
Never take huge cash advances directly from your credit cards before you file for bankruptcy, since you know that all debts will be erased from these cards. This is considered fraud, and even after bankruptcy you can be forced to pay all of that money back to the credit card company.
No one is happy to be bankrupt; sometimes it is the only option. Having read the thoughts presented here, you can rest assured that you have received information from someone who has faced the very difficulties you face today. Learning from others who have filed for bankruptcy is the best way to ensure that you make intelligent decisions and avoid making any mistakes.
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