Being severely in debt is a very frightening experience. In some cases, what started as a manageable amount of debt turns into an insurmountable challenge. When you find yourself in that position, it is not so simple to repair. The following article will give you some pointers on what to do regarding bankruptcy if you are way over your head in debt.
Once you file for bankruptcy, you will have a hard time getting loans or credits. A great way to rebuild your credit is to apply for a prepaid credit card. You can exhibit your desire to rebuild your credit this way. Once creditors see that you are making an effort to restore your credit, they may allow you to get an unsecured card in the future.
Try going to a personally recommended bankruptcy lawyer instead of using a phone book or the Internet. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.
You should be able to meet with a specialized lawyer for free to ask your questions. Most lawyers offer free consultations, so consult with a few before settling on one. Don’t choose a lawyer until your questions about bankruptcy are sufficiently answered. You can think about your decision before making a commitment. This allows you time to speak with numerous lawyers.
Weigh all of your options before declaring bankruptcy. For example, consumer credit counseling services can often help you figure out a workable repayment plan with creditors. Also, you could try to get your payments lowered on your own. If you decide to do this, get a copy of anything you agree to.
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 eliminates all debts. Any debts that you owe to creditors will be wiped clean. 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. When choosing the type of personal bankruptcy that is correct for you, it is very important that you know the differences.
Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. Just know that missing one payment could cause your case to be dismissed.
Do not file for bankruptcy if your income is greater than your bills. 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.
Once your initial filing is complete, it is time to take some time to relax a little. It’s not uncommon to be overwhelmed by the filing process. 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.
Before declaring bankruptcy, it is important to know your rights. It is not unusual for creditors to claim that their debt is not able to be discharged. There are, indeed, some debts that cannot be bankrupted. Among them are student loans, child support and alimony payments. If the bill collector is trying to deceive you, then report that company to your local attorney general’s office.
It can be easy for life to feel like it is spinning out of control when you are having financial troubles. Hopefully, this article’s advice has shown you that there are still plenty of steps you can take to improve your situation even when bankruptcy is in the picture. You can make a true difference in your day-to-day life by following the advice we have presented here.