When someone files for bankruptcy, it’s not a good thing. It is a difficult and embarrassing process that no one wants to go through. Don’t let bankruptcy overwhelm you; the article below can help.
The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. If this applies to you, be sure that you know what the laws of your state are. Each state has their own bankruptcy laws. Some states protect your home, and others do not. Before filing for personal bankruptcy, be certain that you are familiar with the laws.
Ask yourself if filing for bankruptcy is the right thing to do. Alternatives do exist, including consumer credit counseling. Bankruptcy is a permanent part of your credit, so before you make such a big decision, you might want to explore all other choices so that your credit history is affected as minimally as possible.
It should go without saying, but refrain from lying in your bankruptcy filings. Remember that if you hide your valuable assets or income from your bankruptcy trustee, you may risk a number of penalties and complications. Among these is the possibility that you could be blocked from ever filing again.
Don’t feel bad if you need to remind your attorney about any specifics of your case. Don’t assume that he will remember something you told him weeks ago. This is your future in their hands, so don’t be scared to mention it.
You might find it difficult to obtain an unsecured credit card or line after emerging from bankruptcy. If this is so, apply for a secured card or two. This will demonstrate that you’re seriously trying to restore your credit. After a while, you may be able to get unsecured credit again.
If you’re filing for bankruptcy soon, be sure you are going to hire a lawyer. It is difficult to make all of the necessary decisions yourself, and expert guidance will be helpful. A qualified bankruptcy attorney will guide you through the steps and help you do everything properly.
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Under Chapter 7 type bankruptcy, all debts are forgiven. This includes creditors and your relationship with them will become no longer existent. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. Take the time to learn more about these different options so you can make the best decision possible.
Consider if Chapter 13 bankruptcy is an option. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. 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. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Missing a payment under these plans can result in total dismissal by the courts.
If you are making more money than you owe, bankruptcy should not even be an option. Although you may see bankruptcy as a free pass to eliminate your debt, if you can slowly whittle away at your debt with your income, it will be much better than killing your credit score with a bankruptcy filing.
As you can now see, you do not have to let bankruptcy consume your soul. By following the tips presented here, you can avoid filing for personal bankruptcy. Use the tips and advice you’ve learned here to change your habits and thereby change your financial future for the better.