Having to file for personal bankruptcy is never a positive experience. If you are contemplating filing for bankruptcy, it means that you are in a dire financial situation. Use the article that follows as a way to learn about all of your options.
After you have declared bankruptcy, you may have a hard time being approved for unsecured credit. Secured cards can be a great way to get started if this happens to you. They offer you the chance to demonstrate the seriousness with which you now take your financial obligations. If you do well with a secured card and make strides to repair your credit, you will ultimately be able to receive an unsecured card.
Do not give up hope. You can often have property returned to you. Autos, jewelry and even electronics that have been repossessed, could be returned. Any property repossessed within 90 days before filing bankruptcy, may be able to be returned to you. A lawyer will be able to assist you with filing the paperwork to get the items back.
Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. One example would be that a consumer credit program for counseling if you have small debts. You could even negotiate for lower payments. However, you should ensure that you always obtain a written record of all the changes to your debt that you’ve agreed to.
It is possible to keep your home. Filing bankruptcy does not necessarily mean that you will lose your house. If your home value has gone down, or if there’s a second mortgage, you might be able to keep it. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
Understand the differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. Learn the benefits and drawbacks of each type before deciding which is right for you. Learning about bankruptcy is not simple, so call a bankruptcy attorney to make an appointment to ask questions.
Consider Chapter 13 bankruptcy, if you chose to file. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. The window for Chapter 13 repayments is typically 3-5 years. At the end of this time, any unsecured debt is discharged. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
If your income exceeds your obligations, you should not seek bankruptcy protection. Sure, bankruptcy can get rid of that debt, but it comes at the price of poor credit for 7-10 years.
Keep in mind that filing for Chapter 7 bankruptcy may affect other people than just you, including family members, and in some cases, business associates. When filing Chapter 7, you are not legally responsible for the debts in your name. This does not dissolve any co-signers of the debt, and your creditors will continue to try and collect from them.
Even if you are involved with Chapter 13 bankruptcy, it is still possible to get a mortgage or an automobile loan. However, it can be more difficult. You will need to secure the trustee’s approval for any new debt obligation. When meeting with the trustee, bring a budget which shows that you will be able to afford the payment on the loan you are trying to get. You also need to be prepared to answer questions about your need for the new item.
Chose the proper moment to make your move. When filing for personal bankruptcy, it is very important that you act at the correct time. There are occasions where it pays to delay and others where a quick decision is the best option. Speak with a bankruptcy lawyer to discuss the proper timing for you to file bankruptcy.
As you can see, you don’t need to surrender to bankruptcy. The tips from this article can now guide you on the right path to avoid bankruptcy. Use the tips and advice you’ve learned here to change your habits and thereby change your financial future for the better.