Just thinking about bankruptcy can frighten people. Increasing debt, coupled with the inability to support their families is a real nightmare for many people. If this scares you, or you are experiencing this living horror, then this advice will be of use to you.
Knowledge is power when you’re considering bankrupcy; there are many websites available to help you. The United States Justice Department, the ABI (American Bankruptcy Institute), as well as the NABCA (National Assoc. Consumer Bankruptcy Attorneys) are excellent sources of information. The more knowledgeable you are, the more you can be sure that you are making the right decision and that you are taking the right steps to ensure your personal bankruptcy goes as smoothly as possible.
Think through your decision to file for bankruptcy carefully before going ahead with it. Look into credit counseling to see if it could help you work out of your debt without bankruptcy. Bankruptcy permanently affects your credit, so avoid filing until you have exhausted all of your other options.
As filing bankruptcy becomes more of a reality, don’t use your entire savings or your retirement funds to pay creditors or attempt to resolve insolvency. Retirement accounts should never be accessed unless all other options have been exhausted. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
Don’t throw in the towel. When you file for bankruptcy you may be allowed to recover property like your car, electronics or jewelry that might have been repossessed. There is a chance that you can get back your property if it has been less than ninety days since repossession. Talk to a lawyer for help with the petition filing process.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Most attorneys offer a free consultation which you should take advantage of. Meet with a few before finalizing your plans. Choose an attorney who is experienced, educated and well-versed in bankruptcy laws. You can think about your decision before making a commitment. You could even go to different lawyers for advice.
It is important to protect your home when filing bankruptcy. Filing for bankruptcy does not always mean you will end up losing your home. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
Chapter 13 bankruptcy might be a good option, so don’t overlook it. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. This allows you to keep possession of your real estate and property and repay your debt through a debt plan. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. However, if you miss even one payment, the court will dismiss your entire case.
You should weigh every option before thinking about bankruptcy. You might be able to address your debts by arranging a repayment plan or a reduction in your interest rates. Get professional advice on these matters from a bankruptcy lawyer. If you are looking at foreclosure, think about a loan modification program. Your creditors will be willing to work with you to allow you to pay off your debts. They may be able to take late fees off of your account, cut down your interest, or even extend the loan’s repayment period. Because of the fact that creditors would like to see their money they are likely to offer repayment plans versus not getting paid at all if you file for bankruptcy.
People who say that bankruptcy is a scary experience aren’t exaggerating. Even though you feared bankruptcy before, this article can rid you of that fear. Take the info shared here and apply it to your situation where needed so that you can move forward to a brighter future again.
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