The decision to file bankruptcy is difficult, but sometimes unavoidable. This decision may not be easy, but it is comparatively easier when you know what the process entails and how to navigate it. Continue reading for good advice from others that have filed for bankruptcy themselves.
If you are going through a bankruptcy do not fall victim to guilt and pay off debts that you do not need to pay. Avoid ever touching retirement funds until you have no other choice. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
It is essential that you are honest and forthright in the documentation you provide for your bankruptcy filings. Do not try to shield some assets or income from your creditors. This can get you in serious trouble and prevent your bankruptcy petition altogether.
The best way to build your credit up after a bankruptcy is making all your payments on time. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. Using a secured card not only helps to rebuild your credit, but it also keeps you from going more in debt with credit card bills. Unsecured credit may be offered to you quicker than you think after doing so.
Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. Sometimes you can negotiate a reduced payment, though you must strive to get it all in writing.
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. In Chapter 7 most of your outstanding accounts will essentially be erased. The ties with the creditor will be broken. If you file using chapter 13 bankruptcy, you will go through a sixty month repayment plan prior to all your debts being completely dissolved. Both options have advantages and drawbacks, so do your research before deciding.
Be sure you know what the difference between Chapter 13 and Chapter 7 bankruptcy is. By researching each type, you can begin to understand which method 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.
Don’t file for bankruptcy if it is not completely necessary. Perhaps just consolidating some of your existing debt, could make them easier to manage. Going through a bankruptcy is a long and stressful process. Credit will be much harder for you to come by after you file for bankruptcy. Because of this, you should be sure that bankruptcy is your only option before you file.
Chapter 13 Bankruptcy
Consider Chapter 13 bankruptcy, if you chose to file. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. However, if you are unable to properly commit to the plan you agree to, your case can be dismissed.
In difficult financial situations, filing for bankruptcy is sometimes unavoidable. Having read the thoughts presented here, you can rest assured that you have received information from someone who has faced the very difficulties you face today. Taking time to learn from those who have traveled this road before you will make your own journey less stressful.