When you feel certain that you must file for personal bankruptcy, refrain from squandering your life savings to pay off unsecured debt. Do not tap retirement accounts unless there is no other alternative. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
Filing personal bankruptcy is a somewhat complex process. There are different kinds of bankruptcy you can file, and the kind you select depends on your individual financial picture and what types of debt you have. Therefore, it is essential that you learn about bankruptcy prior to petitioning the courts for bankruptcy protection. The ideas in this article are a great place to start.
Try to find a bankruptcy attorney who is personally recommended, rather than off the Internet, or out of the yellow pages. There are way too many people ready to take advantage of financially-strapped individuals, so you must ascertain that your attorney can be trusted.
Find a bankruptcy attorney who offers free consultations, and ask lots of questions. Most lawyers will meet with you for free and give you helpful advice, so meet with several. Therefore consult with different lawyers and get a feel for them, then decide which one suits your needs It is not necessary to come to a decision immediately following the meeting. This allows you time to speak with numerous lawyers.
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. The Chapter 7 variety can help you eliminate your debts almost entirely. This includes creditors and your relationship with them will become no longer existent. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
Consider if Chapter 13 bankruptcy is an option. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. However, if you are unable to properly commit to the plan you agree to, your case can be dismissed.
When you are looking at a Chapter 7 personal bankruptcy, you may well have debts to worry about for which you share responsibility with another person, such as a spouse, family member, or business partner. When filing Chapter 7, you are not legally responsible for the debts in your name. Although filing for bankruptcy excludes your from financial responsibility, co-signers will still be expected to pay the loan amount in full.
Chapter 7 Bankruptcy
Organize your debts into an easy-to-read list. This will be included in your bankruptcy filing, so include every entity that you know you owe money to. Write down the exact amount. Don’t just guess. Avoid rushing through the bankruptcy paperwork; if you want each debt discharged, you need to make sure the numbers are right.
If you have a co-debtor, consider the ramifications that filing a Chapter 7 bankruptcy will have. Once you file for Chapter 7 bankruptcy protection, you no longer have legal responsibility for debts that you and any co-signers originally agreed to. However, the creditors could come after your co-signer and demand full payment for the debt.
If you’re thinking of getting divorced, evaluate the financial consequences of doing so. Many people file for bankruptcy right after getting divorced because they cannot deal with their financial hardships. Reconsidering divorce is usually the best option in any case.
Bankruptcy is a difficult and stressful process, and you will need all the help you can get. To have a reliable and trustworthy guide through the process, find a highly qualified attorney. Look beyond the fees a lawyer charges when you make your hiring decision. You do need someone who is costly, just someone who is good at what they do. Get referrals from those who have used a bankruptcy lawyer, talk to the bureau for better business, and take advantage of free consultations offered by most lawyers. You could even attend a court hearing to see how an attorney handles his case.
Make sure all your debts are included in the discharge so you can avoid filing unnecessarily. Debts like student loans always remain on your report even if you file. If you need to reconcile debts of this kind, use an agency that specializes in credit repair or loan consolidation instead of filing for bankruptcy.
Now you can probably see that filing bankruptcy is a decision that is best thought out carefully before pursuing. If it seems to make sense in light of your financial problems, you should seek an experienced bankruptcy attorney who can guide you toward a fresh, clean start!
When you have figured out that bankruptcy is your only choice, learn as much as you can about bankruptcy laws. Your future depends on you knowing as much as you can and you being personally involved with your bankruptcy.