Nowadays, there are many people experiencing the woes of overwhelming debt. They are bothered by collection agencies and creditors and their bills are not being paid down. If this sounds like you and your situation, filing for bankruptcy may be a good idea for you. The information in this article will help you to decide if this is an option for you.
Individuals often seek to file for personal bankruptcy protection if their debts exceed their ability to repay them. If this is the case for you, you should begin to investigate the legislation in your state. Each state has their own bankruptcy laws. Your home is safe in some states, but in others it’s not. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
It’s important that you understand what bankruptcy is and how it will change your life before you attempt to file a claim. The United States D.O.J., the A.B.I and the N.A.C.B.A. are all useful organizations willing to provide educational material. By having more knowledge, you can make the right decision, as well as be sure you are ensuring that your personal bankruptcy case goes smoothly.
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 has a negative effect on your credit reports, in that it is permanently there. Before you take this step, make sure all your options have been considered.
When it soaks in that filing for personal bankruptcy, don’t use all of your retirement funds, or all of your savings to resolve insolvency or pay creditors. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
Always be honest when filling out paperwork. Not only is hiding income and assets wrong, it is also a crime.
Do not give up hope. If you file for bankruptcy, you might be able to reclaim certain property that has been repossessed, such as your car, electronics or jewelry. If the repossession occurred within 90 days from your filing date, it is possible that some of your property can be returned to you. Consult with a lawyer who can advise you on what you need to do to file a petition.
Brush up on the latest bankruptcy regulations before you decide whether or not to file. Laws are subject to change, and it’s important that you’re educating yourself about current code only. To stay up-to-date on these laws, check out your state’s government website.
Chapter 13
Do some research to find out more about Chapter 13 and Chapter 7. In Chapter 7 bankruptcy, your debts are all eliminated. All creditor relationships will be severed. 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 important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Before filing a bankruptcy claim, make sure that your home is well protected. You don’t have to lose your home just because you are filing for bankruptcy. There are mitigating factors, such as lose of value, or multiple mortgages. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.
Don’t file bankruptcy if you can afford to pay your debts. Although bankruptcy might seem to be an easy way of being able to pay for your debts, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.
Repayment Plan
Make sure bankruptcy is truely your only option before filing. Ask a bankruptcy lawyer if a debt repayment plan or rate reduction would be of benefit. Loan modification plans can help if you are dealing with foreclosure. The lender is able to help you in a number of ways, such as reducing interest rates, eliminating late charges, and even lengthening the loan, giving you more time to pay. Above all else, what creditors want is to get their money. Sometimes they would rather settle for a repayment plan instead of a debtor who is bankrupt.
You may want to see if you can get lower payments on your vehicle if you want to keep it. Lower payments can sometimes be structured into a Chapter 7 solution. The requirements are that your car purchase has to be greater than 910 days before filing, must have a loan that is high in interest, and must have a solid work history.
As you can now see, there is much information available that can help you through your bankruptcy. If you take a rational, methodical approach, you’ll soon be experiencing the fresh start you’ve been waiting for.
