Bankruptcy is a complex process. There are different types of bankruptcy, and the type that you choose depends upon your personal finances and the nature of your debts. Before deciding to file for personal bankruptcy, you should learn everything you can about it. This article is a great place to start learning this information.
Be completely honest whenever you file for personal bankruptcy. Hiding any asset or liability is a risk that will bite you in the end. Whomever you use to file with must know everything there is to know about your finances, both good and bad. Bankruptcy can be a chance to simplify your finances, but any schemes you employ to conceal the truth can ruin that chance for you.
Many bankruptcy attorneys offer the first consultation with no charge, so consult with several before deciding on one. Ask to speak with the licensed attorney and not a representative, who can not offer legitimate legal counsel. Seeking out different attorneys is all part of the process until you find someone that you can trust.
Safeguard your home. It isn’t inevitable that you will lose your house when you file for bankruptcy. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. There is a wealth of information online about each type of bankruptcy and their respective pluses and minuses. Before making any decisions, discuss the information you have learned with your lawyer.
Don’t file for bankruptcy if it is not completely necessary. You may find consolidating your debt may be simpler. Bankruptcy is not a simple, breezy course of action that should be taken lightly. It will affect your access to credit in the future. Because of this, you need to think of bankruptcy as a nuclear option; that is, a last resort.
Chapter 13 Bankruptcy
Research Chapter 13 bankruptcy, and see if it might be right for you. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
Spending time with the people you love is something you should do now. Going through bankruptcy is a lot of stress. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. It is not uncommon for a person to feel the need to pull away from loved ones during the process. Pulling away from people who care for you will not help the situation, and can cause your negative feelings to intensify. This is the reason that you need to take the time out to spend time with everyone you love despite what your financial situation is.
Bankruptcy should not be put off until the very last second. For some people, they tend to ignore their poor financial situation and just wishing it away, but that is only putting you in more danger. Debt can become a big problem rapidly, and if you fail to handle it, you can face foreclosure or garnishment of wages. As soon as you realize your debts far outweigh your income, call a bankruptcy lawyer to talk about what your choices are.
Make certain that you are fully aware of each and every bankruptcy law prior to even considering filing. For instance, you are not allowed to move assets from your name to someone else’s for a year before you file. It is also illegal for someone who files for bankruptcy to drastically increase their debts on credit cards immediately before filing.
Now you can probably see that filing bankruptcy is a decision that is best thought out carefully before pursuing. If you choose bankruptcy as a financial answer for your situation, you can only benefit from having a lawyer dedicated to this industry to help you out.