Having too much debt can be a frightening experience. It is possible for debt problems to escalate out of control, overnight. When you find yourself in such a position, it can be hard to know what to do. This article will provide suggestions on handling bankruptcy if you find yourself completely overwhelmed.
Secured Card
Be aware that getting unsecured credit is going to be tough once you’ve gone through bankruptcy. In this event, you should attempt to apply for a secured card or two. Using a secured card not only helps to rebuild your credit, but it also keeps you from going more in debt with credit card bills. Once creditors see that you are making an effort to restore your credit, they may allow you to get an unsecured card in the future.
You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. The Bankruptcy Code lists assets considered exempt from being affected by bankruptcy. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. If you neglect this important step, you might be blindsided when a possession that is important to you is taken to repay creditors.
Be persistent in researching information about filing for bankruptcy and consult a qualified personal bankruptcy attorney. If you file for bankruptcy at the right time it could enable you to get your property back that you lost to repossession. If you have been subject to a repossession during the 90 days before your filing, you stand a good change of getting your property back. Talk to a lawyer for help with the petition filing process.
Chapter 7
Be sure you know how Chapter 7 and Chapter 13 differ. Under Chapter 7 type bankruptcy, all debts are forgiven. All creditor relationships will be severed. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally 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.
Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. It is important to meet with the actual attorney, not the attorney’s assistant or paralegal; those people are not permitted to give legal advice Interviewing multiple attorneys is a good way to find the best fit.
Investigate your other alternatives before you decide you have to go with bankruptcy. Sometimes consolidating your existing debts can make them more manageable. The bankruptcy process takes forever to finish and is very nerve-wracking. You will have trouble getting credit down the line. Thus, you must make certain that bankruptcy really is the only viable solution to your problems.
Chapter 13 Bankruptcy
Consider Chapter 13 bankruptcy. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
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. You will need to come up with a budget and show that this new loan payment schedule is doable. You also need to be prepared to answer questions about your need for the new item.
Look at bankruptcy as a chance to mature and take responsibility for your personal finances. This process is less that glamorous, and it makes most people lose their self-esteem. These sorts of feelings are not helpful to you. Indeed, they may cause you mental anguish. The best way of dealing with bankruptcy is to keep a positive attitude during this time of financial upset.
Typically, people who have faced bankruptcy swear off credit cards. This isn’t necessarily a good strategy to follow since establishing good credit goes hand-in-hand with getting, and handling, credit in a responsible manner. If you never work on rebuilding your credit after a bankruptcy, you may not be able to qualify for a car loan or mortgage. Start with just one card in order to move your credit in the direction you want it to go.
Sometimes you get overwhelmed with life and you feel as if there’s nothing that you can do about it. Hopefully, this article’s advice has shown you that there are still plenty of steps you can take to improve your situation even when bankruptcy is in the picture. Integrate the tips here into your financial plans and work to make a positive change in your situation.
