Before undertaking the bankruptcy process, ensure you have made the correct decision. Avail yourself of other options, including consumer credit counseling, if they are appropriate for your situation. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
Many people are quick to judge others badly when they have to declare bankruptcy, yet they are also as quick to change their mind if they are suddenly in that boat. Certain life events can make personal bankruptcy the only viable option available. No matter how you found yourself looking at bankruptcy as an option, continue reading so that you can learn how to move forward.
Determine which assets won’t be seized before filing for bankruptcy. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. It is vital that you know the things on this list prior to filing for bankruptcy, in order to determine which of your possessions will be taken away. While it might not be possible to protect a particularly beloved possession, at least you will know in advance whether or not you risk losing it.
When it appears likely that you will file a petition, do not start spending your last remaining funds on debt repayment. No matter what you do, do not touch your personal savings unless there is no other option. You may need to use some of your savings; however, you should not use all of your savings. Remember that you must safeguard your future financial security.
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Should you choose Chapter 7, your total debt load will be erased. All happenings with creditors will disappear. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Make sure you keep reminding your attorney about any important details in your case. You cannot expect your lawyer to remember every important detail without some reminder from you. All information submitted to the court with your signature needs to be double checked.
Research Chapter 13 bankruptcy, and see if it might be right for you. With a consistent income source and less than $250k in debt, try filing for Chapter 13. This allows you to keep possession of your real estate and property and repay your debt through a debt plan. Expect to make payments for up to 5 years before your unsecured debts are discharged. However, if you miss even one payment, the court will dismiss your entire case.
Determine which assets won’t be seized before filing for bankruptcy. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. You need to read the exemptions for your state, so you know what property you can protect. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
Look into all of your options before you choose to file for bankruptcy. There are many other options including debt consolidation and making payment plans with your creditors. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. Lenders can assist you in a lot of ways, by cutting interest rate charges and cutting off late fee charges. They can also lengthen the loan. When push comes to shove, creditors want their money, and they are willing to make concessions to get it and prevent the debtor from declaring bankruptcy.
If you aren’t totally honest about your assets when filing a bankruptcy petition, you could get into serious trouble. Good or bad, you must tell your bankruptcy attorney everything about your financial situation. Don’t hold anything back and formulate a smart strategy to deal with the reality you are facing.
It is still possible to get a mortgage or car loan, even if you are filing for Chapter 13 bankruptcy. This is a lot harder. You must meet with a trustee to gain approval for a new loan. You need to show them why and how you can handle paying back the new loan. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
Stay abreast of new laws that may affect your bankruptcy if you decide to file. Bankruptcy laws are in constant flux, so just because you knew the law last year doesn’t mean that the laws will be the same this year. Your state’s legislative offices or website will have up-to-date information about these changes.
Bankruptcy is a challenging time and can create a huge amount of mental and emotional stress. You need to do your research to find a good bankruptcy lawyer. Don’t make your choice to retain a particular lawyer simply because they are the cheapest. It is not necessary to engage the lawyer who charges the highest fees; all you need is a lawyer of high quality. Do not choose an attorney until you have interviewed them, checked with the better business bureau and checked their standing with the bar association. If you want to know more about a specific lawyer, attend a court proceeding and see how the attorney handles herself.
If you think bankruptcy is an option, you will need to hire a bankruptcy attorney. A reputable lawyer can explain the bankruptcy process and be your representative in court on your behalf. Your lawyer can also show you how to fill out the paperwork, file it properly and be there to answer any questions you may have.
Be sure you know how Chapter 7 and Chapter 13 differ. The Chapter 7 variety can help you eliminate your debts almost entirely. Your responsibilities to your creditors will be satisfied. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. It is vital that you know the differences between these types of bankruptcies, in order to find the option that’s best for you.
You should obtain a copy of your credit report from all three reporting agencies soon after you declare bankruptcy. Check to make sure that your report accurately shows that your debts have been discharged and that closed accounts are also updated. Resolve any problems immediately so you can build up your credit score as quickly as possible.
Be sure your home is well protected. Filing for bankruptcy doesn’t automatically involve losing your home. It is entirely possible that you will be able to keep your home. This is dependent upon the your home’s value and whether or not you have taken a second mortgage. You are still going to want to check into homestead exemption either way just in case.
When filling out the bankruptcy petition, it pays to be honest. If you withhold information from the court, your petition may be refused. It is critical that you reveal all assets and income. You will be more likely to secure a fair and favorable judgment by demonstrating good faith in this way.
If you are making more money than you owe, bankruptcy should not even be an option. Bankruptcy may appear like the easier way to avoid paying your old bills, but it is a huge mark on your credit score and remains there for up to 10 years.
Try not to be embarrassed about filing bankruptcy. It is common for people to feel as if filing for bankruptcy is a symbol of failure. This can cause depression. If you have done research and concluded that bankruptcy is the right course for you to take, view it as getting your financial affairs in order instead of a failure.
A great tip to remember if you have filed for Chapter 13 is that you will still be able to receive a loan, so you shouldn’t refrain from trying. There are extra hoops to jump through. You will have to get this loan approved by your trustee. Draw up a budget, demonstrating that you can afford the new loan payment. You also have to prepare yourself to explain the reasons you need to buy the item.
Before filing for bankruptcy, be sure to choose the kind of bankruptcy that is best for your personal financial situation. There is more than one type of bankruptcy. Do your homework before you make a final decision and file your papers. Balance the positive and negative attributes of each, and seek the advice of professionals before you decide.
Know your rights when filing for bankruptcy. Some debtors will try to tell you your debt with them can not be bankrupted. Few debts exist that are not covered by bankruptcy, such as student loans or child support. If a collector tries to convince you that some other type of debt, such as a credit card, is non-discharagable, get the company’s information and send a report to your state attorney general’s office.
To re-establish credit after your bankruptcy, think about opening one new line. If you can not get a regular credit card get a secured one instead to build your credit. Use these sorts of cards with extreme caution because of the extraordinarily high rates they normally carry. You will have better success applying for, and getting loans and credit cards in the future if you start rebuilding your credit now with a new, secured line of credit.
You should never feel shame for needing to file for bankruptcy. Many people get feeling of guilt when going through bankruptcy. These sorts of feelings are not helpful to you. Indeed, they may cause you mental anguish. Keep a positive state of mind to deal with your tough financial situation.
If you’ve already tried everything you can think of to dig out of your financial mess, it might be time for bankruptcy. You should not let it ruin your life though if you find yourself facing this decision. This article contains many useful tips you need to know about before you make your decision.