Are your finances so awful that you are considering filing for bankruptcy? Do not despair, you are not the only one. There are a lot of people who have turned to bankruptcy as the solution to their financial problems. The following article will inform you about bankruptcy so that you can make the filing process as quick and easy as possible.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. Using your savings is necessary, but decimating it and leaving yourself dangling with no future financial security is not a good idea.
Once the bankruptcy is complete, you may find it difficult to receive unsecured credit. If you do, then try applying for a coupe of secured cards. This will prove that you want to improve your credit score. It will take time, but when creditors see a pattern that satisfies their need to see your good faith with payments, you will then be able to apply for unsecured cards.
Ask those you know if they have an attorney to recommend, instead of finding one on the Internet or in the phone book. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
Learn of new laws prior to deciding to file for bankruptcy. 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. Check the website of your state’s legislation or get in contact with your local office to learn more about these important changes.
Check into less drastic solutions prior to declaring bankruptcy. One example would be that a consumer credit program for counseling if you have small debts. You could even negotiate for lower payments. However, you should ensure that you always obtain a written record of all the changes to your debt that you’ve agreed to.
Your most important concern is to protect your home. It isn’t inevitable that you will lose your house when you file for bankruptcy. It depends what your home value is and if there is a second mortgage, as all this stuff comes into play when determining if you can keep the home. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
Remember to only file for bankruptcy if you need to. 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 credit will be impacted for many years. Because of this, you should be sure that bankruptcy is your only option before you file.
Chapter 13
Consider filing for Chapter 13 bankruptcy. With a consistent income source and less than $250k in debt, try filing for Chapter 13. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
Avoid filing for bankruptcy if you make more money than your monthly bills. Bankruptcy may appear like the easier way to avoid paying your old bills, but it is a huge mark on your credit score and remains there for up to 10 years.
Before filing for bankruptcy under Chapter 7, make sure that you consider the implications this will have on any of your co-debtor, who are usually family members, close friends or business associates. If you choose Chapter 7, you are no longer responsible for joint debts. But, bear in mind, the debt now becomes the sole responsibility of your co-debtor.
Chose the proper moment to make your move. Timing is important, and that is especially true when filing for bankruptcy. For some debtors, immediate filing is ideal, whereas in other cases, it is smart to hold off until a later time. Speak with an attorney who specializes in bankruptcy to figure when is the best time to file, according to your situation.
As you can see by now, many people find themselves pondering whether or not to file bankruptcy. Having read this article, you should feel better prepared to navigate this process. Apply the knowledge from this article to go about your bankruptcy in a smooth fashion.
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