Bankruptcy is something no one wants to experience. People can do their best to stay on top of finances, and when one or more financial emergencies come at them, they find that they have no choice but to look into bankruptcy. If this has happened to you, then use the advice in this article to move forward with your life.
People generally mostly feel the need to get a bankruptcy filed for when they have more money owed than they can get. If this describes your situation, it makes sense to become familiar with relevant laws. Each state has its own set of rules regarding bankruptcy. In a few states, they see to it that your house is protected. This is not the case when it comes to other states. Be aware of bankruptcy laws before filing your claim.
One of the most important things to remember when filing for bankruptcy is to be honest and truthful every step of the way. Not only is hiding income and assets wrong, it is also a crime.
Unsecured Credit
After filing for bankruptcy, you could have trouble acquiring unsecured credit. Look into getting a secured credit card in order to get back on your feet with building credit. This will prove that you want to improve your credit score. Once you’ve built up a history of on-time payments, you may start getting unsecured credit again.
Familiarize yourself with the bankruptcy code before you file. The laws change a lot, so you need to look them up and have a better idea of how to properly approach the bankruptcy process. To know what these changes are, go to your state’s website or contact the legislative offices.
Chapter 7
You may have heard bankruptcy referred to differently, either as Chapter 7 or Chapter 13. Learn the differences between the two before filing. In Chapter 7 bankruptcy, your debts are all eliminated. With very few exceptions, the connections between you and your creditors will be severed. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. Look into both types of bankruptcy before deciding which one would suit your particular needs.
Always protect your house. You do not have to lose your home in the process of a bankruptcy. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. There are other options such as a homestead exemption which offers you a chance to remain in your home, depending on whether or not you meed certain financial conditions.
Learn the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Read up on the topic and familiarize yourself with the benefits and drawbacks of both variations. If you have trouble understanding the wealth of information, talk to your lawyer so he or she can help you make an informed choice.
Don’t hide from your friends and family while you go through bankruptcy. Undergoing bankruptcy can be a difficult experience. It can take a long time, take a great emotional toll and cause people to feel embarrassed and defeated. Avoidance of friends of family during the process is not uncommon. However, self imposed isolation will only make you feel even worse about the process and could even lead to depression. This is the reason that you need to take the time out to spend time with everyone you love despite what your financial situation is.
Don’t automatically assume that bankruptcy is your only option. A lawyer that specializes in bankruptcy law can help advise you of other options, such as repayment plans and reducing interest rates to relieve some of the burden. Look into loan modification plans if you need to deal with an imminent foreclosure. Your creditors will be willing to work with you to allow you to pay off your debts. They may be able to take late fees off of your account, cut down your interest, or even extend the loan’s repayment period. When all is said and done the creditors just want their money, and more often than not will work with you on a repayment plan.
When you are forced to file for bankruptcy, you should have some excellent knowledge on what to do. The more you know, the easier everything is going to be. The above article has provided a lot of this knowledge so that you’re able to deal with your finances with less stress.
