Although bankruptcy causes stress, it can help financially. It is not fun when you have to bear all your finances out in the open and everyone picks apart your financial situation. This may be very uncomfortable; however, after your bankruptcy case has been completed, you can start anew free from the hassles of bill collectors. The article below discusses some tips to make bankruptcy less painful.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. Avail yourself of other options, including consumer credit counseling, if they are appropriate for your situation. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Do not hesitate to remind your lawyer of any details regarding your case. Don’t assume that he’ll remember something from a month ago; tell him again. Remember that you’re the boss. You’re paying your lawyer, so you should not be afraid to have your say. After all, the quality of your life hangs in the balance.
Instead of relying on random selections from the phone book or Internet, ask around and get personal recommendations. There are various companies that prey on the financially desperate, so you need to find someone you can trust to ensure the process goes smoothly,
Before declaring bankruptcy, ensure that all other options have been considered. For example, if your debt is small, try a type of consumer counseling program. Also, you could try to get your payments lowered on your own. If you decide to do this, get a copy of anything you agree to.
Chapter 7
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 involves the elimination of all of your debt. Any ties that you have with creditors will be dissolved. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. Both options have advantages and drawbacks, so do your research before deciding.
Consider filing for Chapter 13 bankruptcy. 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. The plan is usually for a term of three to five years, and a discharge will be granted at the end of that term. 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.
Even if you are involved with Chapter 13 bankruptcy, it is still possible to get a mortgage or an automobile loan. This is a lot harder. You need to speak with your trustee so that you can be approved for a new loan. You need to develop a budget and show that you will be able to afford the new payment. You also have to prepare yourself to explain the reasons you need to buy the item.
Bankruptcy should not be put off until the very last second. A lot of people ignore their financial problems, thinking they are going to go away; that is a big mistake. It doesn’t take long for debt to become unmanageable, and not taking care of it could eventually lead to wage garnishment or foreclosure. When you make the connection that your debt level is too high, contact an attorney that specializes in bankruptcy as soon as possible, to see what can be done.
Make sure you know the bankruptcy laws before filing your petition. Without knowing the exact rules, you could inadvertently run into serious issues that could ultimately lead to your bankruptcy failing. If you commit severe mistakes, your bankruptcy could be dismissed. Make sure you are fully aware about personal bankruptcy before you make any final decisions. This will ensure your bankruptcy will go smoothly.
Exhaust all other option prior to filing personal bankruptcy. Credit counseling is one option you should consider. May non-profit companies are available to help you. They can work with both you and your creditors to find a feasible way in which your debts can be paid off. You make payments to them and they pay your creditors.
Choose a bankruptcy attorney carefully. A lot of rookie lawyers get their start in bankruptcy law. Be sure your lawyer has years of experience and is licensed properly. Use the Internet to look at lawyer’s disciplinary records, background, and client ratings.
Make sure that you include every one of the debts you would like discharged in your bankruptcy filing paperwork. If you do not document certain debts, they aren’t going to be on the discharge. You will be the only one responsible for including all of your debts. Any that are not included, cannot be discharged.
Before filing for bankruptcy, look into which debts it will clear in your situation. Certain classes of debt, including taxes, child support, and student loans, are not eligible for bankruptcy. Try using a loan consolidation service or a type of credit repair agency to reduce debt.
Bankruptcy is a process that has both benefits and drawbacks. No matter why or what put you in this situation, the best thing you can do right now is educate yourself on the bankruptcy process. You will have an easier time with your bankruptcy filing thanks to this article’s tips. Use the tips presented here to help the process goes smoothly and more comfortably.
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