Personal Bankruptcy: Do I Have Any Choices?

Simply mentioning the word bankruptcy can cause people to become nervous and worried. Ever increasing debt, along with the difficulty of supporting a family is very frightening for some 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.

Prior to filing for bankruptcy, be sure you have investigated all of your alternatives. Avail yourself of other options, including consumer credit counseling, if they are appropriate for your situation. Since your credit history will forever note the bankruptcy, you want to make sure that you have tried everything else before you take an action such as this, in order to minimize the effect it will have with regard to your credit history.

Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. Unless there are no other options, your retirement funds should never be touched. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.

Be sure to remind your lawyer if it seems that some details of your situation are forgotten. Do not assume that if you’ve already told him or her something important once, that they will remember it later without a reminder. This is your future in their hands, so don’t be scared to mention it.

Familiarize yourself with the bankruptcy code before you file. The laws change a lot, so you need to look them up and have a better idea of how to properly approach the bankruptcy process. To learn about the changes, you should check out the website of your state’s legislation or you can call their office.

It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. Talk to the lawyer and not his assistant, who may not be legally able to help you. Comparing different lawyers makes it possible to find one with whom you work well.

Before filing a bankruptcy claim, make sure that your home is well protected. Losing your home is thought of as common in bankruptcy cases, but it is by no means inevitable. It is entirely possible that you will be able to keep your home. This is dependent upon the your home’s value and whether or not you have taken a second mortgage. Check to see if you pass the requirements necessary to file for a homestead exemption.

Loved Ones

Spend time with loved ones. Bankruptcy can really wear down your emotional reserves. The long process can leave people stressed out and racked with guilt and shame over having their financial affairs laid out for everyone to see. Lots of people think they need to hide from everyone until this is all done. This is not a good idea because staying alone could cause serious problems with depression. Therefore, it is important that you continue to spend quality time with your loved ones despite, in spite of your current financial situation.

If you can afford to pay your bills, bankruptcy is not a wise option. Filing for bankruptcy can really damage your credit in the long run, by staying on your report for up to ten years.

Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. This is harder. You need to contact your trustee so you can get approved for a new loan. When you meet with your trustee or financial adviser, make sure that you come up with a sound budget proposal. It will also be necessary to show why a new purchase needs to be made.

Look at bankruptcy as a chance to mature and take responsibility for your personal finances. You may need to get credit counseling or simply learn how to balance your budget. These are useless emotions, however, and can be harmful to your mental state. Remembering to stay positive as you go through financial difficulties is a great way to deal with your bankruptcy filing.

Credit Rating

Many people who file for bankruptcy vow to stop using credit cards. This isn’t necessarily a good strategy to follow since establishing good credit goes hand-in-hand with getting, and handling, credit in a responsible manner. Failing to build an acceptable credit rating can prevent you from obtaining financing for a car or home at a later date. Begin with a credit card that has the very low limit and handle it extremely responsibly to begin healing your credit rating.

Once you decide to file, it is important to act in a more financially responsible manner. Avoid taking on more debt right before you file for bankruptcy. Filing bankruptcy should be your first sign that the way you’re living isn’t any good. Now’s the time to get your finances in order so that you can pull your credit out of the gutter. You need to show the court that you have changed and are ready to act in a financially responsible manner.

You do not have to lose everything you own when filing for bankruptcy. You can often keep personal property. Whether jewelry, furnishings, electronics and even clothes – these items can be protected. This depends on the laws in your state, the bankruptcy type for which you file, and your unique finance situation, but it may be possible to retain your home, car and other large assets.

Anyone fearing bankruptcy has a legitimate fear; filing a claim can be scary. The thought of filing may have scared you away in the past, but with this article in hand, you should fear no longer. Use the personal bankruptcy information here as you work your way through your financial situation and make your life situation better for you and your family.