Sadly, bankruptcy is becoming very common nowadays. Most people cite the economy for having to file for bankruptcy. Just because it’s more commonplace doesn’t make it simpler, however. So before you decide to file a claim to get out of debt, you first need to ensure that you understand the implications of the entire process. If you read this article, you will learn what you need to know.
Individuals often seek to file for personal bankruptcy protection if their debts exceed their ability to repay them. When you are faced with this issue, begin to familiarize yourself with your state’s laws. Every state is different when it comes to dealing with bankruptcy. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. Be sure to have some familiarity with the law in your jurisdiction.
Credit History
Before undertaking the bankruptcy process, ensure you have made the correct decision. There are plenty of other options open to you, like consumer credit counseling. Bankruptcy is a serious negative on your credit history so make sure you have no other options before you file. It is important to keep your credit history as positive as possible.
Don’t fear reminding your attorney of any specific details of your case. Chances are that you may have forgotten to tell them about certain specifics that may be important to your filing. Don’t be afraid to speak up, as it is your case and your future will be affected by its outcome.
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. If this happens to you, think about applying for a couple of secured credit cards. This will be a demonstration of the seriousness with which you view rebuilding your credit rating. After a while, you may be able to get unsecured credit again.
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. It is vital that you know the things on this list prior to filing for bankruptcy, in order to determine which of your possessions will be taken away. If you don’t read it, you could have nasty surprises pop up later due to your prized possessions being seized.
Don’t try to hide anything if you are filing for bankruptcy, as this will hurt you in the long run. Penalties may include fines, imprisonment or denial of the filing. Do not leave anything out and come up with smart plan to manage the situation you are dealing with.
Do not give up. When you file for personal bankruptcy, you may even be able to retrieve personal property that has been repossessed. For example you may be able to get your car, electronics and even jewelry returned to you. There is a chance that you can get back your property if it has been less than ninety days since repossession. Consult with a lawyer that can walk you through the filing process.
Chapter 13
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. All debt will be eliminated with Chapter 7. Your ties with all creditors will get dissolved. With a chapter 13 bankruptcy, a 60 month period of time will be established in which you will repay the as much of your debt as possible. Following the 60 month period of time, the remainder of your debt will be excused. It is vital that you know the differences between these types of bankruptcies, in order to find the option that’s best for you.
Protect your house. Filing for bankruptcy does not mean you have to lose your home. You might be able to keep your home, for instance, if you have two mortgages or if your home has lost its value. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Become knowledgeable in regards to details about chapter seven bankruptcy vs. chapter 13 bankruptcy. There is a wealth of information online about each type of bankruptcy and their respective pluses and minuses. Learning about bankruptcy is not simple, so call a bankruptcy attorney to make an appointment to ask questions.
Your trustee may be able to help you secure an auto loan or get a mortgage even though you have filed Chapter 13. However, it can be more difficult. Your trustee can help you acquire a new loan. Create a budget and prove you can afford a new loan payment. You will always have to let them know why this item needs to be purchased.
If you are filing for bankruptcy, it is imperative that you have a good understanding of your rights. Collectors may try to convince you that your debt can’t be discharged. Only a small number of debts are not dischargeable, including student loans and child support obligations. If the bill collector is trying to deceive you, then report that company to your local attorney general’s office.
As you can see, bankruptcy is quickly becoming more popular due to the poor state of our economy. Apply the tips from this article to make the best bankruptcy choices.
