Always take the bankruptcy process seriously. It is important that you understand everything involved in filing bankruptcy. Use the tips in this article to guide you in the right direction. No matter which decision you make, knowledge is essential.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. Retirement accounts should never be accessed unless all other options have been exhausted. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. You might feel tempted to not declare certain assets in your bankruptcy in order to protect them from forfeiture, but if you’re found out, the process could take longer, or worse, you might be banned from filing for bankruptcy completely.
Protect your house. Filing for bankruptcy does not always mean you will end up losing your home. It may be possible to keep your home if the value has depreciated, or there is a second mortgage. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
If you’re unsure, then you need to learn what a Chapter 7 bankruptcy can do for you, as opposed to what Chapter 13 does. Learn the benefits and drawbacks of each type before deciding which is right for you. Go to a specialized lawyer to ask your questions and get some useful advice on what to do.
Remember to spend some quality time with your loved ones. The process for bankruptcy can be hard. The long process can leave people stressed out and racked with guilt and shame over having their financial affairs laid out for everyone to see. Many people don’t feel like socializing during the ordeal. However, this isolation will just make you feel worse, and it could cause you to be depressed. So, it is critical that you keep spending time with the ones you love, regardless of the current financial situation.
Interest Rate
Look at all the alternatives to bankruptcy before filing. Find out if you can receive a reduced interest rate or altered repayment plan instead of bankruptcy filing. If you are facing foreclosure, consider a loan modification plan. 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. Most creditors will be willing to work out an option to avoid not getting paid at all.
If concerned about keeping possessions like a car, find out if your attorney can reduce the payment. Sometimes, as part of the bankruptcy filing, your auto loan can be restructured so that you pay less each month. In order for this to succeed, you must have bought your car in excess of 910 days before filing, have a higher interest loan for it as well as a consistent work history.
Prior to filing for bankruptcy, purge from your vocabulary the word “shame”. The bankruptcy process can make many people feel ashamed, guilty and unworthy. These feelings, however, are of no benefit to anyone, and they can be detrimental to your mental health. If you are filing for bankruptcy and you are thinking negatively about the situation, make an effort to stop that now.
When you are filing for bankruptcy, make sure you list all of the financial information you may have. Forgetting anything can cause a delay, or even a dismissal. Even if you believe that certain financial information is inconsequential, do not avoid including it in your documentation. Include all jobs, assets and loans.
Make sure you know what you should be doing when you file for bankruptcy. There are many laws which govern bankruptcy; therefore, to protect your bankruptcy case, know the rules. Mistakes can also have your case dismissed. Before you go ahead, devote a little time to research and the topic of personal bankruptcy. That way, you will have an easier road.
Credit Counseling
Don’t just assume bankruptcy is the right option, especially if you have not considered others. One good option might be credit counseling. Many different non-profit entities exist that can assist you without charging you any fees. With their assistance, you can reduce the payments you have to make and even get some of the interest removed from your debts. The payments you make go to the credit counseling company, and they send that money to your creditors.
Before you file for personal bankruptcy, take great care in paying off your debts. There are bankruptcy laws which forbid repayment of some creditors within three months before filing. In the case of family members, this period of time may extend to a full year. Study applicable regulations prior to making any financial choices.
Many people who file for bankruptcy vow to stop using credit cards. That is not a great idea, because using credit builds better credit. Credit cards are necessary for proving that you have gained financial stability and for garnering mortgage and auto loan approvals. Begin with a credit card that has the very low limit and handle it extremely responsibly to begin healing your credit rating.
As you have read in this article, there are many ways to file personal bankruptcy. Don’t be overwhelmed by the great wealth of information available to you. Take the time you need to think clearly and analyze the information. Doing this will allow all the information to be processed and benefit your decision making going forward.
