The whole process of filing bankruptcy is complicated. There is more than one type of personal bankruptcy, and your personal financial situation will dictate which type you should choose. The most important step you can take, of course, is to learn what you can about the process before ultimately deciding one way or the other. The following article contains valuable information to help you make that decision.
Filing for bankruptcy is something many people are forced to do when there debts become too much of a burden, and they can no longer afford to pay them. If this is your case, you should do some research about bankruptcy laws in your state. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. For example, the personal home is exempt from being touched in some states, but not in others. It is best to become familiar with your state’s laws regarding bankruptcy before you take the steps to file.
Do not use your retirement fund or savings to pay off creditors. Leave your retirement accounts untouched unless there is absolutely no other alternative. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
Never shirk on the truth in your petition for bankruptcy. It is vital that you disclose all information about your assets and income so there are no delays or penalties, such as a court barring you from filing again later in the future.
Do some research to find out which assets you could lose by filing for personal bankruptcy. The Bankruptcy Code contains a list of various assets that are excluded from bankruptcy. Be well prepared for bankruptcy by reviewing this list. It will tell you whether are not the things you value most are subject to seizure. While it might not be possible to protect a particularly beloved possession, at least you will know in advance whether or not you risk losing it.
Avoid paying for a consultation with the bankruptcy attorney, but do ask many questions. Most lawyers offer free consultations, so consult with a few before settling on one. Make a decision when all your concerns and questions have been addressed well by one lawyer in particular. You can think about your decision before making a commitment. So, this gives you plenty of time to consult with several attorneys.
Consider filing for Chapter 13 bankruptcy. With a consistent income source and less than $250k in debt, try filing for Chapter 13. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Consider that if you even miss one payment, your case will not be considered by the court.
Bankruptcy should not be filed by anyone who makes more than their bills cost. Although bankruptcy might seem to be an easy way of being able to pay for your debts, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.
Before declaring bankruptcy, see if there’s anything less drastic you can do to repair your credit. A lawyer that specializes in bankruptcy law can help advise you of other options, such as repayment plans and reducing interest rates to relieve some of the burden. Loan modification plans can be helpful for those facing foreclosure. There are many ways in which a lender can make adjustments that will be helpful to you. Among them are extending the loan, forgiving late charges and reducing the interest rate. Making arrangements with the creditors to make reasonable payments towards you debt is a much better plan than bankruptcy because the lender simply wants the loan repaid.
After you have filed for bankruptcy, enjoy your life. Many people who undergo this process become way too stressed out. Don’t let the process control you in a negative way. You will get through it, and you should make an effort to remember that. Your life will most likely improve once you’re over this hump, so relax.
When you file for bankruptcy, you should be very aware of your rights. Collectors may try to convince you that your debt can’t be discharged. Most loans can be discharged outside of certain things, like child support or loans you are paying back due to student lending. If a collector tells you your debt won’t be discharged in your bankruptcy and you know that it will, report the collector to the attorney general’s office in your state.
Know the rules of personal bankruptcy prior to petitioning. Your case may be rife with issues due to pitfalls inherent in codes regarding personal bankruptcy. Mistakes can also have your case dismissed. Take time to research things related to personal bankruptcy before you move forward. Doing this will make the process easier.
Don’t just assume bankruptcy is the right option, especially if you have not considered others. You might want to look into the possibility of credit counseling instead. There are a lot of organizations that are non-profits and can assist you. These companies work with creditors to reduce your payments and interest. You’ll make your payments to the company, and the company will pay off your creditors.
Now you know that filing for bankruptcy requires a lot of thought. After weighing all of your options, if you conclude that bankruptcy is the best option for your particular situation, be sure to hire a competent attorney. Follow the advice given in this article to get through this rough time and move on to a more secure financial future.