If you are facing the repossession of valuables, such as cars or jewelry, you may be feeling some fear. When you file for personal bankruptcy, you will be able to sort out your finances and end calls from debt collectors. Find out what you need to know before filing bankruptcy.
Most people that file for bankruptcy owe a lot of money that they could not pay off. If this describes your situation, it makes sense to become familiar with relevant laws. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. Do not file before learning about the bankruptcy laws in your state.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. Don’t touch retirement accounts unless you don’t have a choice. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
Use a personally recommended bankruptcy attorney instead of one found through the Internet or phone books. There are many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.
Never pay to have a consultation with a lawyer, and ask a lot of questions. The majority of lawyers offer their first consult at no cost, so ensure you meet with several to find one that you like. Make a decision when all your concerns and questions have been addressed well by one lawyer in particular. There is no need to feel rushed to decide to file after you talk with your bankruptcy lawyer. You have lots of time for consulting with other lawyers.
Always weigh your options carefully prior to deciding to dive head first into filing a bankruptcy claim. If you owe small amounts of money, you can join a counseling program or straighten your finances out by yourself. It is sometimes possible to negotiate smaller payment by yourself. If you do this, make sure you save a written record of debt modifications that are negotiated.
Make certain that you comprehend the differences between Chapters 7 and 13. Under Chapter 7 type bankruptcy, all debts are forgiven. This includes creditors and your relationship with them will become no longer existent. 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. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. 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.
Chapter 13 Bankruptcy
Consider Chapter 13 bankruptcy, if you chose to file. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. This lasts for three to five years and after this, your unsecured debt will be discharged. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
If you are making more money than you owe, bankruptcy should not even be an option. The cost to your credit history far outweighs the simplicity of the easy-out bankruptcy. This is a hard pill to swallow for many.
Investigate other alternatives before resorting to bankruptcy. You can get your interest rates reduced or enter into a debt repayment plan. Before you file bankruptcy, ask your attorney if any of these are viable alternatives for you. Loan modification plans can help if you are dealing with foreclosure. Your particular loan holders can provide a lot of assistance if you’re just willing to speak with them. You can negotiate lower rates, longer terms, and other means of repayment that may keep you from having to file a claim. When push comes to shove, creditors want their money, and they are willing to make concessions to get it and prevent the debtor from declaring bankruptcy.
While personal bankruptcy is a valid option, you should consider the other options available to you before making your final decision. Bear in mind the fact that a number of services for debt consolidation are actually fraudulent and will cause you more problems. Keep in mind the tips from this article, so that you can make smart financial decisions and prevent debt in the future.
