There are many people who are now in debt levels over their heads. Threats come from collection agencies and other creditors while the bills just keep piling up. If you are in that situation, it may be time to consider personal bankruptcy. Have a look at the information provided here to ascertain if your situation can be improved using this method.
Do some research online about personal bankruptcy to get a better idea of what this procedure implies. The U.S. Justice Department, the ABI (American Bankruptcy Institute), as well as the NABCA (National Assoc. Consumer Bankruptcy Attorneys) are excellent sources of information. The more you know, you can be confident you are choosing the right thing and that you are taking the right road to make sure your bankruptcy proceeds as easily as possible.
Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
It’s not uncommon to learn soon after bankruptcy that you are unable to get an unsecured credit card easily. A great way to rebuild your credit is to apply for a prepaid credit card. This demonstrates to creditors that you are making a good faith effort to repair your credit. After a while, you may be able to get unsecured credit again.
Don’t give up. Filing for personal bankruptcy may possibly enable you to reclaim your personal property that have been repossessed, like your car, electronics and jewelry items. You should be able to get your possessions back if they have been taken away from you within 90 days before you filed for bankruptcy. Get help from your lawyer to file a petition so you can get your items back.
Familiarize yourself with any new law before you make the final step to filing for bankruptcy. This area of law is in constant flux and it is imperative that you know where the law stands at the time you file for your bankruptcy. To stay up-to-date on these laws, check out your state’s government website.
60 Month Period
You may have heard bankruptcy referred to differently, either as Chapter 7 or Chapter 13. Learn the differences between the two before filing. In Chapter 7 most of your outstanding accounts will essentially be erased. The ties with the creditor will be broken. With a chapter 13 bankruptcy, a 60 month period of time will be established in which you will repay the as much of your debt as possible. Following the 60 month period of time, the remainder of your debt will be excused. Take the time to learn more about these different options so you can make the best decision possible.
Safeguard your home. There are many options available to help protect you from losing your home. Depending on certain conditions, you may very well end up being able to keep your home. Another option is the homestead exemption that has certain income and financial requirements, but may also allow you to keep your home.
Be around family as much as possible. Going through a bankruptcy is never easy. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. A lot of folks decide to hide themselves from the world around them until the end of the process. This isn’t true though because when you isolate yourself you will just start to feel worse and may become depressed. Make it a point to catch yourself if you feel yourself pulling away from others. Tell others that you would like to do some enjoyable things together while you go through bankruptcy process, then do it.
Speak with an attorney about any fears you have about losing your car. You may even be able to get your monthly payment reduced. Sometimes, as part of the bankruptcy filing, your auto loan can be restructured so that you pay less each month. It is necessary for you to have bought your car prior to the 910 days preceding your filing, your loan must carry a high rate of interest and you must be employed in order to get such a modification, however.
If you have a co-debtor, consider the ramifications that filing a Chapter 7 bankruptcy will have. You may have your responsibility for your portion of the loan discharged under Chapter 7. Creditors, however, will hold the co-signer liable for the entire balance of the debt.
During a Chapter 13 bankruptcy, you may still be able to get a mortgage or car loan. It is more difficult. First, your trustee will have to approve the loan. Document your budget to prove that you’re going to be able to make the payments. You will also need to have a good reason why you need the item.
Before you even consider filing for bankruptcy, familiarize yourself with the laws surrounding this process. For instance, you may not be aware that a filer is forbidden from transferring assets from his or her name for one full year before the petition is filed. Also, it is against the law for a person to acquire more debt on their credit card prior to filing.
This article should have made it clear that there is plenty of help out there for someone who wants to file for bankruptcy. Bankruptcy can help you start over with and give you tools to become a more responsible consumer.