The national economy remains in poor condition. When the economy tanks, many people lose jobs and accumulate debt. Debts can often lead to bankruptcy, an outcome nobody ever wants. The following article will help you, or your loved ones, gain control of your financial situation and hopefully prevent bankruptcy.
Think through your decision to file for bankruptcy carefully before going ahead with it. You have other choices, including consumer credit counseling. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
When you document your financial records, it is vital that you are 100% truthful in order to have a successful resolution to your bankruptcy process. You must avoid the temptation to conceal any valuables, money or other assets from the courts. If they find that you have lied, you may be faced with fines, penalties or the inability to file in the future.
After a bankruptcy, you may still see problems getting any kind of unsecured credit. If this happens to you, think about applying for a couple of secured credit cards. By doing this, you will be letting people know that you want to fix your credit score. In time, it may be possible for you to obtain unsecured cards.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. It is necessary to be open regarding both the positive and negative aspects of your financial life. Don’t hold back information and create a strategy so you can deal with what’s really happening.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. For example, if you only have a little bit of debt, you might be better off if you went through consumer credit counseling. You may have the ability to negotiate much lower payments, just be sure any debt modifications you agree to are written and that you have a copy.
Chapter 13 Bankruptcy
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Should you choose Chapter 7, your total debt load will be erased. All happenings with creditors will disappear. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.
You can take steps to hang onto your house. Bankruptcy filings don’t necessarily have to end in the loss of your home. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Take the time to find out about each one online, and look at the advantages and disadvantages of each. If you don’t understand the information you researched, consult with your attorney about the details before you decide which type of bankruptcy you want to file.
Before filing bankruptcy consider every available avenue. Some people have great luck with handling debt with debt consolidation, which means taking out only one loan to pay off many loans. Bankruptcy is a long process that can be stressful. Remember that your credit will be affected by the mark of personal bankruptcy for a long time. This is why it is crucial that you explore your other debt relief options first.
Consider filing for Chapter 13 bankruptcy. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. 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. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
The economy is showing signs of recovery, but unemployment and underemployment are still high. Even without steady income, there are things you can do to avoid bankruptcy. Hopefully, the information in this article has provided you with useful information that can help you stay out of bankruptcy. We wish you well.