Deciding to file for bankruptcy is not an easy decision to make; but, in some cases, it is necessary. This situation is handled best when you know what to expect and have information about what to do. Read on for knowledge and wisdom passed on from those who have gone through bankruptcy themselves.
Do some research to find out which assets you could lose by filing for personal bankruptcy. The Bankruptcy Code contains a list of various assets that are excluded from bankruptcy. Make sure that you carefully look over this list prior to filing to discover if your valuable assets will be seized. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Most lawyers will meet with you for free and give you helpful advice, so meet with several. You should make a final decision only once all of the questions or concerns are sufficiently attended to. Take your time choosing the right attorney to assist in your bankruptcy. Take your time, and schedule consultations with more than one lawyer.
Investigate any new laws before deciding to file a bankruptcy. If you want to file for bankruptcy successfully, it’s important to review the latest applicable laws. They tend to change frequently. To stay up-to-date on these laws, check out your state’s government website.
See if there is an alternative you can use before declaring bankruptcy. For example, consumer credit counseling programs can help if your debt isn’t too large. You may have luck negotiating lower payments by dealing directly with creditors, but be sure to document any get and new agreement terms in writing from each creditor.
Consider filing for Chapter 13 bankruptcy. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. 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.
Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. However, it will be a longer and more arduous task. Before you can take out a new loan, you will have to clear it with your trustee. You will need to come up with a budget and show that this new loan payment schedule is doable. You should also be prepared to explain why you need to purchase the item.
Banish the word “shame” from your vocabulary before you file for bankruptcy. This process is less that glamorous, and it makes most people lose their self-esteem. Feelings such as these are not of value to you and it is possible for them to be psychologically harmful. Try to keep a positive attitude during this tough time and you will be able to better cope with bankruptcy.
Going through bankruptcy is tough and can be mentally and emotionally draining. The best way to lessen this stress is to employ a lawyer, who can handle most of it for you. Don’t let cost be the sole factor in who you hire. Your lawyer does not necessarily have to be the most expensive one; however, you should be certain of his or her qualifications and abilities. Ask for referrals from folks who have filed and check reputations with the BBB. You might be able to view a court hearing. You might be able to watch how your prospective attorney handles the case.
Before you even consider filing for bankruptcy, familiarize yourself with the laws surrounding this process. You should not transfer your assets to anyone in the year preceding your bankruptcy filing. It is also illegal for someone who files for bankruptcy to drastically increase their debts on credit cards immediately before filing.
No one is eager to file for bankruptcy, but in many cases, the alternatives are even worse. After reading this article, you now know how people who have actually experienced bankruptcy got through the process. Learning from others who have filed for bankruptcy is the best way to ensure that you make intelligent decisions and avoid making any mistakes.