Filing bankruptcy is a bit complicated. There is not simply one type of bankruptcy, so the choice you make will be determined by your debts and what finances you have. That’s why you should research personal bankruptcy prior to deciding whether or not you should file. This article will give you some of the important facts about bankruptcy.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If you’re in this situation, learn about the laws where you live. Each state has its own laws regarding personal bankruptcy. Your house is safe in certain states; however, in other states, it isn’t. See to it that you understand the bankruptcy laws in the area that you live prior to filing.
Be certain you understand all you can about bankruptcy by researching reputable sites that offer good information. The United States Justice Department, the ABI (American Bankruptcy Institute), as well as the NABCA (National Assoc. Consumer Bankruptcy Attorneys) are excellent sources of information. The more knowledgeable you are, the more you can be sure that you are making the right decision and that you are taking the right steps to ensure your personal bankruptcy goes as smoothly as possible.
When it gets time to think about bankruptcy, avoid using your retirement or savings to pay off the creditors or even make attempts to settle the debt. You should make every effort to leave your retirement accounts untouched until your retire. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
Make sure you are completely honest when filing for bankruptcy. Hiding your assets is never wise. Penalties may include fines, imprisonment or denial of the filing. Lay everything out on the table so that you and your lawyer can devise a plan to get you out of this mess.
Chapter 7
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. In Chapter 7 bankruptcy, your debts are all eliminated. This type of bankruptcy ends any relationship you might have with creditors. If you file using chapter 13 bankruptcy, you will go through a sixty month repayment plan prior to all your debts being completely dissolved. Both options have advantages and drawbacks, so do your research before deciding.
Remember to only file for bankruptcy if you need to. Consider whether debt consolidation may be a more viable alternative. Filling for bankruptcy is a lengthy, stressful process. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. This is why it is crucial that you explore your other debt relief options first.
If you have fears that you will lose your car, ask your lawyer about the possibility of lowering your car payments. A lot of the time, your payments may be lowered due to Chapter 7 bankruptcy. The car loan must have been initiated prior to 910 days before your petition. It must carry a loan with high interest. You should also have a steady history of work.
Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. But, it could be harder. You will need to secure the trustee’s approval for any new debt obligation. You need to develop a budget and show that you will be able to afford the new payment. You should also be prepared to explain why you need to purchase the item.
Make sure the time is right when you file a bankruptcy claim. When it comes to filing for bankruptcy, your timing is important. Sometimes, filing as soon as you can is best, while other times, it is wise to get past the worst problems first. Speak with a bankruptcy lawyer to see when is the best time for you to file bankruptcy.
Do some research about bankruptcy laws before filing for bankruptcy. You need to know certain things, like the fact that it’s illegal to transfer any asserts 12 months before filing your claim. Also, the filer can not increase their debt before filing.
Don’t wait when you’re thinking about filing for bankruptcy and have been for a while. Yes, it is hard to admit that you need help; however, the longer you wait the deeper in debt you get. Take responsibility to talk with a bankruptcy expert sooner, rather than later. The longer you wait, the more difficult the situation can become.
As you now know, bankruptcy is not a decision that should be made lightly. If bankruptcy is sensible option for you, a good and experienced bankruptcy attorney is a must have to help you begin the process of starting your financial situation anew.
