Bankruptcy is a huge financial decision and should not be lightly considered. Check out the advice given in this article so that you can have an idea of what you can expect before you make such an important decision. Learn as much as you can beforehand.
Think through your decision to file for bankruptcy carefully before going ahead with it. Debt advisors are one of the many other avenues you can consider. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
Retirement Accounts
Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. Retirement accounts should never be touched if it can be helped. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Seek a less serious option prior to filing for bankruptcy. If your debt is relatively low, you may be able to manage it with credit counseling. You may also find success in negotiating lower payment arrangements yourself, but be certain to get any arrangements with creditors in writing.
Make sure that you understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. Chapter 7 eliminates all debts. You will no longer be liable for any money that you owe to your creditors. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. To make the wisest choice, you will need to understand the consequences of each of these two options.
Take advantage of free consultations with lawyers and the ability to sift through and find the right one. Make sure you meet with a licensed attorney rather than a paralegal or assistant, because it is illegal for these people to give legal advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
Chapter 13 Bankruptcy
Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. However, if you miss even one payment, the court will dismiss your entire case.
Spending time with the people you love is something you should do now. The process of bankruptcy can seem brutal. It takes a long time, it can be stressful, and people feel unworthy, guilty and ashamed. Most people adopt a very negative attitude toward bankruptcy. However, becoming a hermit will only increase feelings of self-doubt and could make you depressed. It’s imperative that you spend as much time with loved ones as you can, even in the midst of your financial dilemma.
Even if you are involved with Chapter 13 bankruptcy, it is still possible to get a mortgage or an automobile loan. There will, however, be obstacles. Your trustee must approve any new loans such as this. Draw a budget up and show how you can pay the newer loan payment. An explanation of need will also be necessary.
Make sure you understand your rights as you file for bankruptcy. Some debt collectors like to say that you cannot file for bankruptcy on these debts. You should know that only a few debts cannot be erased, including student loans and child support. If a collector tries to convince you that some other type of debt, such as a credit card, is non-discharagable, get the company’s information and send a report to your state attorney general’s office.
After reading the previous article, it is obvious that bankruptcy is not something that takes place on its own. Many steps must be taken, and they must be completed properly. Hopefully, with what you learned today, you learned what it means to file for bankruptcy and you can avoid being in this situation in the future.
