The mere thought of bankruptcy is enough to strike fear into the hearts of people. Mounting debt, combined with insufficient support for the family, is a horrible experience for a large number of people. If any of this frightens you, or you’re currently living this particular nightmare, then the contents of this article are going to prove of good use to you.
It is simple math; when you owe more than you are able to pay off, a bankruptcy is the likely solution. If this describes your situation, it makes sense to become familiar with relevant laws. The laws governing bankruptcy vary from state to state. Your house is safe in certain states; however, in other states, it isn’t. Be sure to have some familiarity with the law in your jurisdiction.
If you are going through a bankruptcy do not fall victim to guilt and pay off debts that you do not need to pay. Retirement funds should be avoided at all costs. You may need to withdraw some funds from your savings account, but don’t take everything that is there as you will be bereft of any financial backup if you do.
Do not despair, as it’s not the end of the world. If you’ve had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy. If you have been subject to a repossession during the 90 days before your filing, you stand a good change of getting your property back. Talk to your lawyer to find out how to go about properly filing a petition.
Be sure you know how Chapter 7 and Chapter 13 differ. If Chapter 7 is what you file, your debts will get eliminated entirely. Your responsibilities to your creditors will be satisfied. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. Both options have advantages and drawbacks, so do your research before deciding.
Investigate your other alternatives before you decide you have to go with bankruptcy. Perhaps consolidating your existing debt can make it easier to manage. The whole process of filing for bankruptcy can be a long, and hard one. Your credit will be impacted for many years. You only want to file for bankruptcy after you have exhausted your other options for dealing with your debts.
Chapter 13 Bankruptcy
Consider if Chapter 13 bankruptcy is an option. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. The length of the plan is generally up to five years, and when this is over, you will be free of unsecured debt. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
You may want to see if you can get lower payments on your vehicle if you want to keep it. A lot of the time you can lower payments by filing for Chapter 7 bankruptcy. In order for this to be considered, your car loan must be one with high interest, you need a solid work history and the car should have been bought 910 days or more prior to you filing.
Take action when the time is right. When it comes to filing for personal bankruptcy, timing is everything. There are occasions where it pays to delay and others where a quick decision is the best option. Speak with a bankruptcy lawyer to see when is the best time for you to file bankruptcy.
Don’t let shame consume you during the bankruptcy process. A lot of people have a negative opinion of bankruptcy, mostly because they misunderstand this procedure. These feelings do not help you and provide no value. These difficult financial times can easily take their toll on anyone. One of the best ways to cope with the situation is to maintain a positive attitude.
Many people are frightened of bankruptcy, and rightly so. That said, the best antidote to fear is information, and this article has given you that in spades. Take advantage of all the suggestions you’ve read here so that you can get your finances on the right track.