What To Know Before You File For Bankruptcy

The mere thought of bankruptcy is enough to strike fear into the hearts of people. Mounting debt, combined with insufficient support for the family, is a horrible experience for a large number of people. If you’re afraid of this scenario (or worse if you are living at), it is our sincere hope that the advice given here will be of help to you.

Be certain you are making the right choice before you file for bankruptcy. You have other options, including consumer credit counseling help. Bankruptcy has a negative effect on your credit reports, in that it is permanently there. Before you take this step, make sure all your options have been considered.

Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. 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.

Find a bankruptcy attorney who offers free consultations, and ask lots of questions. You can meet with a few lawyers before deciding on one. Most lawyers provide a free initial consultation. Choose to file only if your lawyer has convinced you that this is the best decision. There is no need to feel rushed to decide to file after you talk with your bankruptcy lawyer. This allows you time to speak with numerous lawyers.

Chapter 7

Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. In Chapter 7 most of your outstanding accounts will essentially be erased. You will be removed from any contracts you have with your creditors. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. 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.

Consider filing using chapter 13 bankruptcy. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. Not only can you repay your debts through consolidation, personal property can be kept, as well as real estate. The window for Chapter 13 repayments is typically 3-5 years. At the end of this time, any unsecured debt is discharged. Keep in mind that even missing one payment can be enough for your whole case to get dismissed.

Make time to visit with family and friends during the bankruptcy process. Going through a bankruptcy can be an excruciating experience. It can be long and drawn out which adds lots of stress and leaves people feeling empty inside. Many people decide to hide away from the world until the process is over. You shouldn’t do this, though, as staying away from the world can amplify any emotional issue you are having, and they could even morph into full-blown clinical depression. Spend time with your family, talk about your problems and find things that relax you.

If your earnings are higher than your expenses then filing for bankruptcy is a waste of time and money. Although bankruptcy might seem to be an easy way of being able to pay for your debts, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.

There are many ways to resolve financial difficulties other than bankruptcy, and you should investigate all of them first. There are many recouses available to help you lower your payments and get back on track. If you are looking at foreclosure, think about a loan modification program. 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. Creditors want their money. Often, they are willing to work out repayment plans with you in order to get it.

It’s normal for people to be scared of bankruptcy, since it really is a frightening process. Don’t let your fear take over. You now have the knowledge necessary to overcome the fear. Start making use of this bankruptcy advice right now and give your financial life a fresh new start.