You might fear the IRS because they could seize assets, such as your car. Filing for bankruptcy can help ease your financial burdens and put an end to harassing phone calls from debt collectors. To make your way through filing for bankruptcy smoothly, follow the tips presented in this article.
If you are feeling like you are seriously going to have to file for bankruptcy then do not clear out your savings. Retirement accounts should never be accessed unless all other options have been exhausted. Although you may need to tap into your savings, you should not use up all of it right now and jeopardize the financial security of your future.
Ask for a free consultation with your bankruptcy attorney and ask questions about experience and education. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. Only choose a lawyer if you feel like your questions were answered. Take your time choosing the right attorney to assist in your bankruptcy. You could even go to different lawyers for advice.
When a bankruptcy is imminent, retain a lawyer immediately. Bankruptcy can be highly confusing and stressful, and you need an unbiased partner who can help simplify the process. An attorney specializing in personal bankruptcies can assist and make certain things are being handled correctly.
Chapter 7
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. Under Chapter 7 type bankruptcy, all debts are forgiven. Your ties with all creditors will get dissolved. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. 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.
Safeguard your home. You do not have to lose your home in the process of a bankruptcy. There are mitigating factors, such as lose of value, or multiple mortgages. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
It is important to know how Chapter 7 filings differ from Chapter 13 filings. Be sure you go on the Internet and do your research to see what’s best for you. Once you have done your own research, be sure to review your findings with your lawyer, who is the expert. This way, you can be sure of making a well informed choice.
If you are considering filing for personal bankruptcy, be certain that this is really the right course of action for you. Perhaps consolidating your existing debt can make it easier to manage. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. The future of your credit will be greatly affected. You have to make certain that you absolutely have no other choice.
Consider filing a Chapter 13 bankruptcy. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. The plan is usually for a term of three to five years, and a discharge will be granted at the end of that term. Consider that if you even miss one payment, your case will not be considered by the court.
Spending time with the people you love is something you should do now. The process of bankruptcy can seem brutal. The long process can leave people stressed out and racked with guilt and shame over having their financial affairs laid out for everyone to see. Lots of people decide they should hide from everyone else until it is all over. However, becoming a hermit will only increase feelings of self-doubt and could make you depressed. Therefore, it is important that you continue to spend quality time with your loved ones despite, in spite of your current financial situation.
Debt Repayment
Make sure bankruptcy is truely your only option before filing. You may qualify for alternatives such as debt repayment plans or interest rate reductions. Ask your bankruptcy attorney about these options. If you are facing foreclosure, consider a loan modification plan. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. At the end of the day, creditors want to get paid, and sometimes a debt repayment plan is preferable to dealing with a bankrupt debtor.
Before filing for bankruptcy, establish the fact firmly in your mind that you have nothing to be ashamed of. This process is less that glamorous, and it makes most people lose their self-esteem. Continuing to let yourself feel that way can damage your emotional health and does not benefit you in your endeavors to deal with your financial situation. Having the right outlook during a tough financial upheaval is a great attitude in coping with bankruptcy.
Bankruptcy should be your last resort. Avoid debt consolidation services and credit counseling services that seem too good to be true. Keep the advice from this piece in mind to help you make smart financial decisions.
