Nobody is enthusiastic about filing for bankruptcy, but sometimes it is simply the right financial choice. This situation is handled best when you know what to expect and have information about what to do. Keep reading for information that can help you get through this trying time.
Don’t be afraid to remind your attorney of certain details in your case. Don’t assume that they’ll remember something important later without having a reminder. This is your bankruptcy and your future, so never be nervous about speaking your mind.
If possible obtain a personal recommendation for a bankruptcy lawyer instead of randomly choosing one. Companies are constantly popping up, claiming to help, yet only seek to profit from your misery. In ensuring that your bankruptcy is as simple as possible, trusting your attorney makes a big difference.
Become knowledgeable in regards to details about chapter seven bankruptcy vs. chapter 13 bankruptcy. Research them online to see the positive and negative aspects of each one. If anything you see is unclear or doesn’t make sense, go over it again with your attorney before making the final filing decision.
Chapter 13 Bankruptcy
Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. However, if you were to miss a payment, the court would dismiss your case right away.
If you make more money than what you owe, filing for bankruptcy is not a good option. You should know that filing for bankruptcy will ruin your credit score for at least ten years and that improving your credit score will be expensive.
You may want to see if you can get lower payments on your vehicle if you want to keep it. Filing under Chapter 7 is usually a good way to lower your payments. There are a few requirements that you have to meet to be eligible, though. You have to have bought the car more than 2.5 years ago, your loan’s interest rate needs to be over a certain amount, and your employment history has to be good.
If you filed for Chapter 13 bankruptcy, you can still get a mortgage or a car loan. However, it won’t be as easy as it may have been to get one prior to the bankruptcy. Your trustee can help you acquire a new loan. Draft a personal budget to show that you will be able to repay your new loan. An explanation of need will also be necessary.
If you are planning to file bankruptcy, avoid taking large cash advances from credit cards thinking that the debt will be erased. That is considered fraudulent behavior, and you can still have to pay the credit card back, bankruptcy or no.
Watch how debts are paid off prior to filing. Bankruptcy laws generally prohibit certain creditors from being paid back 90 days before filing and family can be around a year! Do your research rather than making financial decisions blindly.
Don’t put off handling the research or procedures for the bankruptcy process if that is the route you’re taking. It can be difficult to ask for help, but as you wait, you accrue more debt. If you talk to a financial professional, they can assess your situation and give you suggestions on what could solve the problem.
It is not something you want to do; however, bankruptcy is a necessity for many struggling with debt. After reading this article, you should have learned some important information about the bankruptcy process. Taking time to learn from those who have traveled this road before you will make your own journey less stressful.
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