Bankruptcy is a two-sided coin: relief/stress. Be prepared to go through your finances with a fine toothed comb and share the information with lots of unfamiliar people. Though, once it is done and discharged, you can begin to rebuild without the pressure from creditors. Read on for advice on easing the pain of bankruptcy.
Think through your decision to file for bankruptcy carefully before going ahead with it. There are plenty of other options open to you, like consumer credit counseling. Bankruptcy leaves a permanent mark on your credit history, so before you take such a large step, you want to exhaust all other options so that the future effects on your credit history are as minimal as possible.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. You might feel tempted to not declare certain assets in your bankruptcy in order to protect them from forfeiture, but if you’re found out, the process could take longer, or worse, you might be banned from filing for bankruptcy completely.
When looking for a lawyer to handle your bankruptcy claim, the best way to go is off of a personal recommendation instead of simply flipping through the phone book. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
Before filling for bankruptcy, determine which assets will be exempted from seizure. You can find a listing of the asset types that are excluded from bankruptcy in the Bankruptcy Code. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
Learn all the latest laws before you file bankruptcy. Bankruptcy laws are always changing, and you need to be aware of any changes so your bankruptcy can be properly filed. Your state’s website should have the information that you need.
Know the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 eliminates all debts. You will no longer be liable for any money that you owe to your creditors. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. It’s important to know what differences come with every type of bankruptcy. This will let you find out what’s best for you.
Protect your house. It isn’t inevitable that you will lose your house when you file for bankruptcy. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
Ensure that you bankruptcy is your best choice. Consider whether debt consolidation may be a more viable alternative. Going through a bankruptcy is a long and stressful process. Remember that your credit will be affected by the mark of personal bankruptcy for a long time. This is why you must make sure bankruptcy is your last resort.
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.
Filing for bankruptcy should not be done on a whim. For example, you can always talk with a lawyer to see about different options through creditors or other means that will not require wiping the entire slate clean. Various loan plans out there can be a lifesaver if you’re facing a foreclosure. These plans allow you a longer pay off period by extending the term of the loan, reducing the rate of interest or forgiving late fees. Most creditors will be willing to work out an option to avoid not getting paid at all.
Filing bankruptcy has its good and bad points. It doesn’t matter why you have to file, but you must be properly educated. This article should help you learn more about personal bankruptcy. Use these tips to empower yourself before, during and after your bankruptcy.