When someone has to file for bankruptcy, it is never a good thing. It is a difficult and embarrassing process that no one wants to go through. Read this article to learn more about bankruptcy and make the best decision.
Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If you have unmanageable debt, you need to familiarize yourself with regional bankruptcy laws. Every state is different when it comes to dealing with bankruptcy. Your home is safe in some states, but in others it’s not. Before filing for personal bankruptcy, be certain that you are familiar with the laws.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. Lying on your filing can cause dire consequences such as: delays, penalties, being prevented from re-filing, or even jail time.
When looking for a lawyer to handle your bankruptcy claim, the best way to go is off of a personal recommendation instead of simply flipping through the phone book. There are so many dime-a-dozen companies out there who make it a practice of preying on financial desperation. You need to make sure your bankruptcy goes smoothly, so find someone you know you can trust.
Keep with what you have decided to do. There may still be way to get repossessed items back after you file for bankruptcy. If the items were repossessed less than three months prior to your filing date, you may be able to recover them. Talk to a lawyer for help with the petition filing process.
Seek a less serious option prior to filing for bankruptcy. If your debts are really not overwhelming, you may find the assistance you need by consulting a consumer credit counselor. You may have the ability to negotiate much lower payments, just be sure any debt modifications you agree to are written and that you have a copy.
Chapter 13 Bankruptcy
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. Chapter 7, for example, will wipe away every one of your outstanding debts. Any ties that you have with creditors will be dissolved. If you file using chapter 13 bankruptcy, you will go through a sixty month repayment plan prior to all your debts being completely dissolved. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
Determine if bankruptcy is necessary. Consolidation could be the avenue you need to get your finances back in order. Going through a bankruptcy is a long and stressful process. It will affect your access to credit in the future. You only want to file for bankruptcy after you have exhausted your other options for dealing with your debts.
Bankruptcy Filing
If you are earning enough to cover your bills, don’t file for bankruptcy. Remember that the record of your personal bankruptcy filing will be discernible on the report of your credit for as many as 10 years. For this reason, bankruptcy filing should not be taken lightly.
Before declaring bankruptcy, see if there’s anything less drastic you can do to repair your credit. Find out if you can receive a reduced interest rate or altered repayment plan instead of bankruptcy filing. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. A good lender will be able to assist you in a variety of ways, from getting rid of your late charges to reducing interest rates. You may even be able to get a loan extension, giving you the extra time you need to pay your debt off. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
Take some time after filing for bankruptcy to enjoy life. It’s easy to be stressed during this time. That stress could lead to complete depression, if you do not take the necessary steps to fight it. You must realize that things will get better over time.
It is possible to obtain new vehicle and home loans while a Chapter 13 case remains active. It is much harder. You must meet with a trustee to gain approval for a new loan. Present a planned budget that shows how you can take on the loan payment and stay current. You will always have to let them know why this item needs to be purchased.
Filing a petition for bankruptcy should be a last resort. The advice in this article will be valuable as you work to find another financial path. Make the best use of this information to get your life back on track and prevent further damage to your credit.
