Facing bankruptcy makes life difficult. Your financial options become very limited. Your credit score has been damaged and it can be difficult to get loan approvals. However, although difficult, it is not impossible to secure a loan.
If bankruptcy is an option for you, secure the services of an attorney. It is unlikely that you will be able to comprehend all the various rules and regulations involved in bankruptcy law. Choose an attorney versed in personal bankruptcy to make sure you don’t make mistakes.
Be sure your home is well protected. Bankruptcy filings do not necessarily mean that you have to lose your house. If your home value has gone down, or if there’s a second mortgage, you might be able to keep it. If you meet certain criteria, you may be able to retain ownership of your home even after filing for bankruptcy.
There are two different kinds of personal bankruptcy you can file for: Chapter 7 and Chapter 13. Go to a reputable website and research the benefits and detriments of each type of bankruptcy. If you’re really not sure how this all works after your research, meet with your lawyer and ask them prior to making a decision.
Chapter 13
Consider if Chapter 13 bankruptcy is an option. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Missing a payment under these plans can result in total dismissal by the courts.
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. This is harder. You will need to secure the trustee’s approval for any new debt obligation. Draft a personal budget to show that you will be able to repay your new loan. You should also be prepared to explain why you need to purchase the item.
It is in your best interest to be abreast of your rights in petitions for bankruptcy. Some debtors will try to tell you your debt with them can not be bankrupted. Only a few debts are immune to bankruptcy. Taxes, student loans and child support would be the major ones. If these are not the categories in which your debts fall, double check to see if the type of debt can be bankrupted. If it can, be sure to file a complaint about the debt collector with the office of the state attorney general.
Be sure you’re acting when the time is right. When you time things right, it does you good, especially when you’re filing for personal bankruptcy. Sometimes, you may need to file quickly; however, at other times, you should wait until the worst is over. Speak to a bankruptcy lawyer to determine what the ideal timing is for your personal situation.
Prior to filing for bankruptcy, purge from your vocabulary the word “shame”. Filing for bankruptcy leads people to feel all sorts of emotions like shame, guilt and feeling irresponsible. Feeling like this will not help your situation and can actually do serious damage to your mental well-being. Remembering to stay positive as you go through financial difficulties is a great way to deal with your bankruptcy filing.
It is important to file bankruptcy before its too late. It is all too common for people to hope that their financial difficulties will disappear if they don’t give them any attention. If you have failed to make payments for several months but have continued making purchases on credit, your petition may be denied. As soon as you’ve decided that you no longer have a handle on your debts, consult a bankruptcy lawyer to see if bankruptcy is right for you.
Filing for personal bankruptcy does not mean you are limited in you daily life. As long as you do what you need to do in order to get your credit back into shape, you can get back on top again. So begin saving your money and you will realize how much difference it makes when shopping for a home loan or car.
