When you’re indebted to people or institutions, it’s only a matter of time before they show up at your door to collect. Sometimes literally. You can stop calls from debt collectors and resolve your financial issues if you consider filing for bankruptcy. Keep reading to gain useful insight about navigating the process.
Before filing for personal bankruptcy, make sure you are doing the right thing. Avail yourself of other options, including consumer credit counseling, if they are appropriate for your situation. Bankruptcy is a serious negative on your credit history so make sure you have no other options before you file. It is important to keep your credit history as positive as possible.
Once you file for bankruptcy, you will have a hard time getting loans or credits. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. They offer you the chance to demonstrate the seriousness with which you now take your financial obligations. After a certain time, you will then be able to acquire credit cards that are unsecured.
It is important to protect your home when filing bankruptcy. Filing for bankruptcy will not always result in losing your home. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
Learn the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Learn the benefits and drawbacks of each type before deciding which is right for you. If you have trouble understanding the wealth of information, talk to your lawyer so he or she can help you make an informed choice.
Determine if bankruptcy is necessary. You may find consolidating your debt may be simpler. Going through a bankruptcy is a long and stressful process. Your credit will be impacted for many years. This is why you must make sure bankruptcy is your last resort.
Remember that filing for Chapter 7 personal bankruptcy will not just affect you. Think about the effect it will have on business associates, friends and family or anyone else who may be a co-signer with you. When filing Chapter 7, you are not legally responsible for the debts in your name. Your creditors can then come after your co-debtor for full repayment of the debt.
Understand the rights you have as a bankruptcy filer. Some debt collectors like to say that you cannot file for bankruptcy on these debts. However, there are few debts that cannot be eliminated, like student loans and child support payments. If these are not the categories in which your debts fall, double check to see if the type of debt can be bankrupted. If it can, be sure to file a complaint about the debt collector with the office of the state attorney general.
Find the right time to take action. When filing for personal bankruptcy, it is very important that you act at the correct time. In certain situations, you should file right away, but other situations will warrant you waiting. Speak with a bankruptcy lawyer about when the best time is to file for your specific needs.
Learn about the personal bankruptcy rules before petitioning. There are many laws which govern bankruptcy; therefore, to protect your bankruptcy case, know the rules. If you commit severe mistakes, your bankruptcy could be dismissed. Before you begin bankruptcy proceedings, research as much as you can. This can save you a lot of time and make the entire process easier.
Bankruptcy is an option, but you should look at other options before filing. Be wary of debt consolidation companies who can drive you even further into debt. Keep in mind the tips from this article, so that you can make smart financial decisions and prevent debt in the future.