How You Can Decide To File For Bankruptcy

The circumstances that culminate in a bankruptcy filing are likely unpleasant, though they do not need to define the rest of your life. With a clean slate, it is possible to start over both financially and personally. Keep reading for how you can make bankruptcy a second chance instead of financial doom.

Bankruptcy Laws

Generally bankruptcy is filed when a person is facing insurmountable debt. If this sounds familiar, you should read up on the 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. Your home is safe in some states, but in others it’s not. Familiarize yourself with the bankruptcy laws of your state prior to filing.

Before you file for bankruptcy, carefully consider if it is the right option for you. Look into other options, such as consumer credit counseling. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.

After a bankruptcy, you may still see problems getting any kind of unsecured credit. If that is the case, you should try applying for one, or two secured cards. Having a credit card of any type will allow creditors to realize that you’re attempting to work in the right direction to repair your credit. If you pay your secured card off on time, you’ll eventually find that companies will start offering you unsecured credit.

Be completely honest whenever you file for personal bankruptcy. Hiding any asset or liability is a risk that will bite you in the end. Your bankruptcy lawyer has to know every detail of your finances, whether bad or good. Be completely honest in your paperwork to avoid a situation that may end in severe punishment.

Before declaring bankruptcy, ensure that all other options have been considered. Those with smaller debts may find use in a program for consumer credit counseling. Some creditors will work with you to help you pay off your debt with lower interest rates, lower late fees, or an extended loan period.

Be certain that bankruptcy truly is your best option. Consider whether debt consolidation may be a more viable alternative. The bankruptcy process takes forever to finish and is very nerve-wracking. It will also limit your ability to get credit for the next few years. Because of this, you need to think of bankruptcy as a nuclear option; that is, a last resort.

Chapter 13

Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Keep in mind that missed payments will trigger dismissal of your case.

Look at all of your options prior to deciding to file for bankruptcy. You might be able to address your debts by arranging a repayment plan or a reduction in your interest rates. Get professional advice on these matters from a bankruptcy lawyer. Look into loan modification plans if you need to deal with an imminent foreclosure. Your particular loan holders can provide a lot of assistance if you’re just willing to speak with them. You can negotiate lower rates, longer terms, and other means of repayment that may keep you from having to file a claim. Most creditors will be willing to work out an option to avoid not getting paid at all.

If you really want to keep your vehicle, speak with your lawyer about possible choices. Filing under Chapter 7 is usually a good way to lower your payments. There are qualifications, such as the loan being high interest and a good work record for this option.

Consider other options prior to filing for personal bankruptcy. One good option might be credit counseling. There are even non-profit companies that may be able to help you. These companies lower your interest and payments by working with your creditors. You will pay them, and in turn, they will pay the people you owe money to.

A lot of people who file for bankruptcy swear they will never use credit of any kind ever again. That is not a great idea, because using credit builds better credit. If you never work on rebuilding your credit after a bankruptcy, you may not be able to qualify for a car loan or mortgage. Begin with a credit card that has the very low limit and handle it extremely responsibly to begin healing your credit rating.

Compile a list of the money your currently owe. You will need this list when you file, so it is important for it to be as compete as possible. Write down the exact amount. Don’t just guess. Don’t be careless about this step, as discharge depends on submitting the correct numbers to the court.

Judging from the information contained within the article alone, you can now see that there are ways to get out from under the piling debt. Nonetheless, filing for personal bankruptcy can be a watershed moment. Try using the tips in this article so you can make bankruptcy into the most positive experience possible.

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