Filing for bankruptcy is a huge decision in anyone’s life. Before you go through with it, you need to understand the gravity of the situation. Unless you realize every single little aspect of the proceedings to come, you might end up biting off more than you can chew. The information in this article will help you separate fact from fiction. Whatever your particular difficult situation entails, you can learn how to handle it with a little research.
Bankruptcy Laws
The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. If you find yourself going through this, you should know all about the laws that are in your state. Each state has their own bankruptcy laws. In some areas, your residence may be completely exempt, but in others, it will not be. Be aware of bankruptcy laws before filing your claim.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. Retirement accounts should never be accessed unless all other options have been exhausted. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
Before you file for bankruptcy, find out which of your assets will be exempt from seizure. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. It’s crucial to read that list before filing to see which of your prized possessions can be seized. Failure to do this could cause some ugly surprises down the road when you discover that your valuables must be seized.
No good will come of trying to conceal your assets or your liabilities in the bankruptcy process; you want to be scrupulously honest when you declare bankruptcy. Whoever provides your legal consultation must be privy to all of your financial information. Do not hold back anything, and form a sound plan to make peace with your reality.
Think carefully about your different options before filing for bankruptcy. For example, consumer credit counseling programs can help if your debt isn’t too large. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
Chapter 13
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. All debt will be eliminated with Chapter 7. Any ties that you have with creditors will be dissolved. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
Since the majority of attorneys are willing to provide no-cost initial consultations, it is smart to meet with more than one before you make a selection. Make sure that you meet with an actual lawyer and not an assistant or paralegal, as these people are not allowed to provide legal advice. Look for a lawyer who you can relate to.
It is possible to keep your home. Filing for bankruptcy does not always mean you will end up losing your home. It may be possible to keep your home if the value has depreciated, or there is a second mortgage. 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.
Learn how Chapter 7 bankruptcy and Chapter 13 bankruptcy differ from each other. By researching each type, you can begin to understand which method is right for you. Before making any decisions, discuss the information you have learned with your lawyer.
Consider all options before filing for bankruptcy. For example, you can always talk with a lawyer to see about different options through creditors or other means that will not require wiping the entire slate clean. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. 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. Making arrangements with the creditors to make reasonable payments towards you debt is a much better plan than bankruptcy because the lender simply wants the loan repaid.
Forget about detrimental terms, such as shame, when you are filing for personal bankruptcy. You may need to get credit counseling or simply learn how to balance your budget. But, such emotions get you nowhere, and they can cause significant mental issues to emerge. These difficult financial times can easily take their toll on anyone. One of the best ways to cope with the situation is to maintain a positive attitude.
Now you know that there a variety of methods you can use when it comes to filing for bankruptcy. Do not get overwhelmed by the plethora of information available to you. Take you time to figure out everything and keep these tips in mind. That way, you’ll make the best decisions.
