Bankruptcy definitely causes short-term stress, but if you’re responsible, it can be a relief in the long term. The stress is having to deal with your financial crisis and those involved in the process. On the other side, you will no longer receive calls from bill collectors and you can work on your finances. The article below discusses some tips to make bankruptcy less painful.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. It is vital that you disclose all information about your assets and income so there are no delays or penalties, such as a court barring you from filing again later in the future.
Research what assets are exempt from seizure before you decide to declare bankruptcy. The Bankruptcy Code lists assets considered exempt from being affected by bankruptcy. It is important to be aware of this list so you will know what assets are saved. 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.
Don’t throw in the towel. Bankruptcy might help you get back things you thought you’d lost and had repossessed, such as electronics, vehicles and jewelry. If the items were repossessed less than three months prior to your filing date, you may be able to recover them. Speak with a lawyer that will provide you with guidance for the entire thing.
Hire a lawyer if you plan on filing for bankruptcy. Filing for bankruptcy is a complicated procedure, and you may not be aware of all the ins and outs. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. If you owe small amounts of money, you can join a counseling program or straighten your finances out by yourself. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
Chapter 7
The two main kinds of bankruptcy are Chapter 7 and Chapter 13. Make sure you understand them so you know what is best for you. If Chapter 7 is what you file, your debts will get eliminated entirely. Your former ties with creditors will cease to exist. If you file using chapter 13 bankruptcy, you will go through a sixty month repayment plan prior to all your debts being completely dissolved. It’s important to know what differences come with every type of bankruptcy. This will let you find out what’s best for you.
Take steps to ensure your home is protected. Filing for bankruptcy will not always result in losing your home. You might be able to keep your home, contingent on certain factors, such as your home decreasing in value or having a second mortgage. Check to see if you pass the requirements necessary to file for a homestead exemption.
Remember to only file for bankruptcy if you need to. It might be possible to consolidate some of your debt instead. Going through a bankruptcy is a long and stressful process. It will also make it tough for you to secure credit after your filing is complete. Because of this, you should be sure that bankruptcy is your only option before you file.
When filing for personal bankruptcy you should always be aware of your rights. Many creditors or bill collectors might tell you your debts cannot be included in a bankruptcy. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If you know that a debt can definitely be bankrupted, yet the collector still harasses you, file a report with the attorney general in your state.
It is important to file bankruptcy before its too late. It is a big mistake to avoid financial problems, thinking they may go away on their own. 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.
Know the bankruptcy code backwards and forwards before filing. You should not transfer your assets to anyone in the year preceding your bankruptcy filing. Also, a person cannot legally increase their debt amount on credit cards prior to filing.
Try your hardest to present a complete representation of your current financial situation. If you don’t do this, your file could be delayed or dismissed. Even small amounts of money contribute to your overall financial picture, so do not exclude them. When it comes to the types of things you might not be thinking about adding, just think about any automobiles you have, any money under the table you’re making, etc.
Bankruptcy is a process that has both benefits and drawbacks. Each person has their own reasons to file. Your job is to make sure you keep all the information you can on hand, as you progress. The advice you have been provided with has probably helped you better understand bankruptcy. Using these tips in the process of filing can make you feel much better.
