Just thinking about bankruptcy can make people fearful. Increasing debt, coupled with the inability to support their families is a real nightmare for many people. If you have any fear or apprehension about bankruptcy, the advice found in this article will be of help to you.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. Look into credit counseling to see if it could help you work out of your debt without bankruptcy. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
Learn all the latest laws before you file bankruptcy. Laws are ever-evolving. You must stay current with bankruptcy laws if you want to be successful in your challenge. To learn about any changes, search the Internet or contact your state’s legislative office.
Consider other alternatives before filing for bankruptcy. For example, you want to look into credit counseling. This is the best option for small debts. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Unsecured Debt
Find out more about Chapter 13. If your source of income is regular and your unsecured debt is less than a quarter million, Chapter 13 bankruptcy is something you are able to file for. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. However, if you miss even one payment, the court will dismiss your entire case.
Once your bankruptcy filing is under way, take the time to decompress a little. It can be several months between the initial filing and the final discharge of debts. That stress can lead to depression, if you don’t take the right steps in fighting it. Once the process if over, your life will improve.
Know your bankruptcy rights. There are bill collectors who will claim that you cannot add your debts to your bankruptcy case. There are very few debts, such as child support or student loan debt, that can’t be bankrupted. 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.
Create a list of all of your finances before filing for bankruptcy. Failing to disclose all of your financial information can cause your bankruptcy petition to be dismissed, or, at the very least, delayed. No matter how insignificant a sum seems, include it in the documentation. Include any income from jobs that you do on the side or assets, such as property and vehicles.
Understand the rules and laws before submitting your petition for bankruptcy. There are some clauses within bankruptcy that could cause you upsets. Small errors could even cause your case to be dismissed. Do as much research as possible about bankruptcy before you file. This will make the bankruptcy process much simpler.
Be mindful of paying off outstanding obligations before you file a bankruptcy petition. You may find that bankruptcy law prohibits you from paying back some types of creditors for 90 days before you file, and a year for family members. Learn the rules regarding bankruptcy before making any final financial decisions.
Many people who file for bankruptcy vow to stop using credit cards. That is not a great idea, because using credit builds better credit. If you don’t ever use credit, your credit history will not improve, and you may not be able to purchase important things like a home and car. Start by using just one credit card, and propel your credit in a positive direction.
Personal Property
Don’t believe the myth that declaring bankruptcy means you lose everything you own. You can keep some personal property. Whether jewelry, furnishings, electronics and even clothes – these items can be protected. The laws of your state and the kind of bankruptcy for which you are filing, coupled with your financial situation, will determine what personal property you are allowed to retain. Additionally, the retention of large assets, such as your automobile and your home, is determined by these considerations.
If you’re thinking about filing bankruptcy, also think about hiring a lawyer. A qualified attorney could give you advice that is necessary for filing and could represent you as you go to court making the process simpler. Also, a lawyer can assist you with paperwork and give you the answers you are looking for.
Credit Report
Once your bankruptcy is over, request a copy of your credit report from all of the credit reporting bureaus. Be sure to check your credit report for accuracy of closed accounts and discharged debts. Ask about any discrepancies once you see any, so that you could start repairing your credit.
It is not unusual for people to be worried about bankruptcy; the process is nerve-wracking. Don’t let your fear take over. You now have the knowledge necessary to overcome the fear. Use this personal bankruptcy advice as soon as possible and make things better for yourself and your loved ones.
