No one ever thinks that they will go through a bankruptcy. Changing circumstances often creates a situation in which there’s no better choice, therefore, knowing how to properly deal with it the right way is important. If you have questions about what you should do in this situation, continue reading to learn some great advice.
Visit web sites and read information to learn as much as possible about the topic of personal bankruptcy. Many sites, including the U.S. Department of Justice, the American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys, all provide valuable information. The more knowledge you have, the more you are able to make right decisions and find a new future.
Find out what you exemptions are prior to filing bankruptcy. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. You may find yourself unpleasantly surprised when the things you value the most are taken from you without warning. This is why it is very important the familiarize yourself with this list.
Any bankruptcy consultation should be free of charge. Most lawyers offer free consultations, so talk to a few before making your decision. Therefore consult with different lawyers and get a feel for them, then decide which one suits your needs Take your time before you decide to file after you meet with your lawyer. So, this gives you plenty of time to consult with several attorneys.
Safeguard your most valuable asset–your home. You don’t have to lose your home just because you are filing for bankruptcy. Depending on whether the value of your home has decreased or if you have a second mortgage on the home, you may end up keeping it. There are other options such as a homestead exemption which offers you a chance to remain in your home, depending on whether or not you meed certain financial conditions.
Be certain that bankruptcy truly is your best option. You might be better off consolidating your debt or availing yourself of some other remedy. The whole process of filing for bankruptcy can be a long, and hard one. It will affect your access to credit in the future. You have to make certain that you absolutely have no other choice.
Chapter 13 Bankruptcy
Consider Chapter 13 bankruptcy, if you chose to file. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. You can secure your home under Chapter 13 and pay your debts with a payment plan. The length of the plan is generally up to five years, and when this is over, you will be free of unsecured debt. Keep in mind that even missing one payment can be enough for your whole case to get dismissed.
Don’t isolate yourself from family and friends. Bankruptcy proceedings can be extremely harsh. It takes time and a lot of people feel stressed and ashamed throughout this procedure. Most people adopt a very negative attitude toward bankruptcy. However, you will only feel worse about what has happened, which may lead you into depression. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
After your initial filing, take time to enjoy yourself a bit and get your mind off of it. Bankruptcy is a stressful process: you will have to go over your bad financial decisions and perhaps feel ashamed about your decision. That stress can lead to depression, if you don’t take the right steps in fighting it. Things will be sunnier after you take positive steps to move forward.
If you have fears that you will lose your car, ask your lawyer about the possibility of lowering your car payments. Chapter 7 usually can help payments be lowered. There are qualifications, such as the loan being high interest and a good work record for this option.
You can take out a mortgage or car loan while filing Chapter 13 bankruptcy. However, the process of approval is a bit more stringent. Before you can take out a new loan, you will have to clear it with your trustee. Create a budget and prove you can afford a new loan payment. You will also need to have a good reason why you need the item.
Don’t wait until it is too late to file for bankruptcy. Some people think that by ignoring financial problems, they will just disappear. This kind of thinking could prove to be a mistake. Debts can multiply very quickly, and can result in you losing money to wage garnishment, or even losing assets that are part of a secured loan. Speak with a bankruptcy lawyer as soon as you become aware that you cannot handle your debts.
Before you file bankruptcy, consider how you will pay off your debts. When you’re planning on filing bankruptcy, your finances have to be in a state of limbo, for lack of a better term. Paying off creditors, transferring assets, and acting in any way other than financially strapped may result in a failed claim. Know the laws prior to deciding what you are going to do.
You should immediately vow to be more financially responsible before you actually file for bankruptcy. Do not take on more debt or use more of your current credit. Judges and bankruptcy trustees take your repayment history into account when deciding the terms of your bankruptcy. Let them see how you are making positive changes to your personal financial management by demonstrating what you are doing right now.
If you find that filing for bankruptcy is the best option for you, be sure that you fully understand the process. When you are properly informed, you make the whole process easier for yourself. By starting with the information we have presented here, you should be able to begin to come to grips with your personal bankruptcy situation.