Bankruptcy is a complex process. There are many kinds of bankruptcy. They one you decide on should be based on your current debts and finances. Before you decide to file for personal bankruptcy, you need to educate yourself about it. In the following paragraphs, you’ll find some tips that will get you off to a good start.
Never lie about anything in your bankruptcy petition. Lying on your filing can cause dire consequences such as: delays, penalties, being prevented from re-filing, or even jail time.
Research what assets are exempt from seizure before you decide to declare bankruptcy. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. Be sure that you study this list. Make yourself aware of any assets you have that could be seized. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
Consider other alternatives before filing for bankruptcy. Those with smaller debts may find use in a program for consumer credit counseling. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.
Chapter 13
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Chapter 7 involves the elimination of all of your debt. Any debts that you owe to creditors will be wiped clean. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.
Many bankruptcy attorneys offer the first consultation with no charge, so consult with several before deciding on one. Ensure that your meeting is actually with the attorney, not with a paralegal or an assistant. People in these positions are unable to offer legal advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
Learn the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Research both types of bankruptcy online, and weigh the positives and negatives each would offer you. If you are confused by what you find, be sure to ask your attorney to explain anything that is unclear before you make your decision about filing.
It is important to look at your financial situation from all possible angles before you decide to file for bankruptcy. Some alternatives to filing for personal bankruptcy include debt repayment plans, interest rate reduction plans, and debt consolidation. Talk with the personal bankruptcy lawyer to find out more. If a foreclosure is on your horizon, look into loan modification plans. There are a lot of ways that your lender can assist you, such as reducing interest rates, eliminating late fees, or extending the term of your loan. Creditors would rather be repaid, however slowly, than have you declare bankruptcy.
If you have filed for Chapter 13 bankruptcy, you will still be allowed to apply for and receive a mortgage or car loan. It’s a bit more difficult, though. You must meet with a trustee to gain approval for a new loan. You need to show them why and how you can handle paying back the new loan. You will always have to let them know why this item needs to be purchased.
Debt Collectors
Know your bankruptcy rights. Occasionally, debt collectors will attempt to convince you that your debt isn’t eligible for bankruptcy. There are a few debts that cannot be cleared, such as student loans and child support, but be sure to know the details when dealing with debt collectors. If the bill collector is trying to deceive you, then report that company to your local attorney general’s office.
Before filing for bankruptcy, establish the fact firmly in your mind that you have nothing to be ashamed of. Many people feel guilty, embarrassed and unworthy when dealing with bankruptcy. 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.
If you are considering bankruptcy, do not leave it until the last possible moment to do so. Some people will just ignore their outstanding debts, hoping that someone or something will come and save them, but this never ends well. It is too easy for debt to mount up and become uncontrollable, which could lead to loss of assets or wages. Once you’ve decided that you can’t manage your large amount of debt, it’s time to contact a qualified attorney.
Now you know that filing for bankruptcy is something to be considered before going through with it. With your finances in turmoil, seek a reputable attorney who has bankruptcy experience. This will allow you to see this as a true, fresh experience.
