There are many emotions experienced by those going through personal bankruptcy. People going through bankruptcy worry about living in debt while trying to survive. They think they are stuck, but they really aren’t, and neither are you, thanks to the following tips.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. Unless there are no other options, your retirement funds should never be touched. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
Don’t give up. Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. If the items were repossessed less than three months prior to your filing date, you may be able to recover them. Consult with a lawyer who can advise you on what you need to do to file a petition.
Familiarize yourself with the bankruptcy code before you file. The laws are constantly undergoing changes, so you must stay on top of them if you are going to file for personal bankruptcy correctly. Your state’s legislative offices or website will have up-to-date information about these changes.
Before declaring bankruptcy, ensure that all other options have been considered. If you owe small amounts of money, you can join a counseling program or straighten your finances out by yourself. Also, you could try to get your payments lowered on your own. If you decide to do this, get a copy of anything you agree to.
Make certain that you comprehend the differences between Chapters 7 and 13. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. All creditor relationships will be severed. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. It’s crucial that you know the differences between all of the various kinds of bankruptcies so that you may choose the best option for your situation.
Make sure your home is safe. There are many options available to help protect you from losing your home. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
Remember to only file for bankruptcy if you need to. It might be possible to consolidate some of your debt instead. Bankruptcy is not a simple, breezy course of action that should be taken lightly. The future of your credit will be greatly affected. Needless to say, if some alternative strategy will allow you to take care of your debts, you should give it a try before resorting to bankruptcy.
Chapter 13
Research Chapter 13 bankruptcy, and see if it might be right for you. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. This allows you to keep possession of your real estate and property and repay your debt through a debt plan. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Don’t hide from your friends and family while you go through bankruptcy. The process of bankruptcy can seem brutal. It is long, full of stress and leaves individuals having feelings of shame and guilt. A lot of folks decide to hide themselves from the world around them until the end of the process. Pulling away from people who care for you will not help the situation, and can cause your negative feelings to intensify. So, it is critical that you keep spending time with the ones you love, regardless of the current financial situation.
When your income surpasses your bills, you should not be filing bankruptcy. 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.
You can still take out a car loan or mortgage while you are in Chapter 13 bankruptcy. But, it could be harder. Your trustee must approve any new loans. Draw a budget up and show how you can pay the newer loan payment. You will also need to have a good reason why you need the item.
Make sure that you act at the appropriate time. Timing is critical, particularly when it comes to filing for bankruptcy. Sometimes, filing as soon as you can is best, while other times, it is wise to get past the worst problems first. Speak with an attorney who specializes in bankruptcy to figure when is the best time to file, according to your situation.
Consider all available options before deciding to file for personal bankruptcy. You should consider credit counseling. This does not necessarily have to cost you, as there are some organizations that will assist you for free. They can help you to lower both your debts and interest owed to creditors. You’ll make your payments to the company, and the company will pay off your creditors.
After reading this article, hopefully you now know that bankruptcy does not have to mean doom and gloom. Though it is very difficult, personal bankruptcy is not the end. Just use the tips provided here and you can slowly, but surely, dig yourself out of debt.
