Being buried in debt is a terrifying experience. It’s not uncommon for debt to grow out of control quickly. The problem now is that it becomes much tougher to fix. You might consider bankruptcy, look through this article and find out why.
Exhaust every other option before making the decision to file for personal bankruptcy. Avail yourself of other options, including consumer credit counseling, if they are appropriate for your situation. Bankruptcy has a negative effect on your credit reports, in that it is permanently there. Before you take this step, make sure all your options have been considered.
If you are planning to file for bankruptcy, be sure to learn what types of assets you will be able to keep and which can be seized. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. Make sure that you review this list before you decide to file, to see if you can hang on to your most important possessions. 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.
Be sure to hire an attorney before you embark upon filing for personal bankruptcy. Bankruptcy can be highly confusing and stressful, and you need an unbiased partner who can help simplify the process. A qualified bankruptcy attorney can guide you through the filing process.
Do some research to find out more about Chapter 13 and Chapter 7. In Chapter 7 most of your outstanding accounts will essentially be erased. With very few exceptions, the connections between you and your creditors will be severed. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
Prior to choosing a bankruptcy attorney, seek a free consultation with at least three attorneys. Make sure that you meet with an actual lawyer and not an assistant or paralegal, as these people are not allowed to provide legal advice. Take some time to talk to different lawyers to find one that fits your needs, and meshes well with you.
Safeguard your most valuable asset–your home. Bankruptcy filings do not necessarily mean that you have to lose your house. It depends what your home value is and if there is a second mortgage, as all this stuff comes into play when determining if you can keep the home. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Filing for bankruptcy is not the best choice if your monthly income is enough to cover your bills. While bankruptcy may seem like an easy way out of having to pay back all of the debt that you owe, it is a stain that will remain on your credit report for seven to ten years.
Before ultimately deciding whether or not to file for bankruptcy, be sure to weigh the different options available to you. Before filing, talk with an attorney who can help you weigh all of your options. Loan modification plans can help if you are dealing with foreclosure. Sometimes your lender will work with you to help pay off your debt by giving you a lower interest rate, forgiving late fees, or extending the time period of your loan. When all is said and done, creditors want their money and find repayment plans preferable to not getting paid at all.
Make sure you consider implications of bankruptcy before filing for Chapter 7. When filing Chapter 7, you are not legally responsible for the debts in your name. However, the creditors could come after your co-signer and demand full payment for the debt.
Make sure you act at an appropriate time. Timing is everything, especially in personal bankruptcy filings. For some people, filing right away is best, however for others, waiting a while is best. Discuss your particular situation with your bankruptcy attorney to determine the best time to file.
Do not think of filing for personal bankruptcy as a shameful thing. For many people, bankruptcy is a source of guilt and feelings of worthlessness. But, such emotions get you nowhere, and they can cause significant mental issues to emerge. Focusing on the positive during this stressful time is a good strategy for coping with your ordeal.
Don’t drag your feet when it comes to filing bankruptcy. Do not avoid your creditors; they will not go away. It is important to decide on a course of action as soon as you begin experiencing financial problems. If you have failed to make payments for several months but have continued making purchases on credit, your petition may be denied. Once you are aware that your financial situation is not manageable any more, your best bet is to speak with a bankruptcy attorney and find out what he or she recommends.
Sometimes, life can throw you a curve ball that you were not expecting. By following the pointers presented in this article, you will be able to keep your finances under control while proceeding through bankruptcy. Use this advice to create a better sense of command of your life.