Being in debt is far from fun, and it is even downright scary at times. Sometimes it happens quite quickly, from some financial problems to losing all control in a matter of weeks or months. Unfortunately, it’s not easy to fix them when that happens. Read on to find tips, insight, and valuable information for clearing your debt and getting a firm grasp on your finances.
Do some research online about personal bankruptcy to get a better idea of what this procedure implies. 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 information you have, the more confident you can be about any decision you make and you will know that you are doing the best thing possible for your situation.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Retirement accounts should never be accessed unless all other options have been exhausted. Using your savings is necessary, but decimating it and leaving yourself dangling with no future financial security is not a good idea.
If you aren’t totally honest about your assets when filing a bankruptcy petition, you could get into serious trouble. All of your financial information, be it positive or negative, must be disclosed to those in charge of filing your case. They need to know it all. Lay everything out on the table so that you and your lawyer can devise a plan to get you out of this mess.
Don’t throw in the towel. Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. If it has been 90 days or less between the repossession of your property and your filing, you might be able to get your property back. A qualified bankruptcy attorney can walk you through the petition process.
Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. Bankruptcy laws are in constant flux, so just because you knew the law last year doesn’t mean that the laws will be the same this year. To learn about any changes, search the Internet or contact your state’s legislative office.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. There is a wealth of information online about each type of bankruptcy and their respective pluses and minuses. Engage your attorney in a conversation about each type, and ask him to answer any questions you may have before deciding which kind is right for you.
If you are going to be filing for bankruptcy, think about filing Chapter 13. If you owe an amount under $250,000 and have a consistent income source, Chapter 13 may be right for you. This type of bankruptcy protects your assets from seizure and lets you repay your credits over the course of a few years. This repayment period usually lasts from three to five years. If you make your payments faithfully during that time, any remaining unsecured debt will be eliminated. Missing a payment under these plans can result in total dismissal by the courts.
If your paycheck is larger than your debts, avoid filing for bankruptcy. Understand that while declaring bankruptcy will eliminate many of your debts, you will have difficulty obtaining credit and will pay more in interest for the credit you do receive for at least seven years.
Before you file for personal bankruptcy, weigh all of your options. You can get your interest rates reduced or enter into a debt repayment plan. Before you file bankruptcy, ask your attorney if any of these are viable alternatives for you. If you are facing foreclosure, consider a loan modification plan. 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. When all is said and done, creditors want their money and find repayment plans preferable to not getting paid at all.
Don’t forget to enjoy your life once your finances get fixed. Bankruptcy is a stressful process: you will have to go over your bad financial decisions and perhaps feel ashamed about your decision. You do not want to have to deal with depression in addition to your financial troubles, so you should take steps to keep yourself happy. Your life will most likely improve once you’re over this hump, so relax.
Sometimes life just happens and you feel like there is little that you could do about it. The above article has provided you with advice to allow you to handle your finances and deal with the option of bankruptcy. Apply the tips you learned from this article into your life.