When a person needs to file for personal bankruptcy, it is not ever a happy moment. Bankruptcy can be ugly, embarrassing and a tough thing to talk about. This article can help you deal with bankruptcy in the best way possible.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Retirement funds should be avoided at all costs. 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.
Do some research to find out which assets you could lose by filing for personal bankruptcy. The Bankruptcy Code includes a list of the types of assets that are exempt from the bankruptcy process. Make sure that you carefully look over this list prior to filing to discover if your valuable assets will be seized. Failure to do this could cause some ugly surprises down the road when you discover that your valuables must be seized.
Be honest when filing for bankruptcy, because hiding liabilities or assets can only cause trouble to you. Wherever you file, that court has to be made aware of all details regarding your finances, positive and negative. Do not hold back anything, and form a sound plan to make peace with your reality.
Make sure your home is safe. Filing for bankruptcy doesn’t automatically involve losing your home. You might be able to keep your home, contingent on certain factors, such as your home decreasing in value or having a second mortgage. 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.
Chapter 13
Learn what you can about Chapter 13 bankruptcies. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. However, if you miss even one payment, the court will dismiss your entire case.
Take some time after filing for bankruptcy to enjoy life. The filing process is extremely stressful for a lot of the people who go through it. Depression and burn-out from pent of stress will do nothing to help your situation, so it is critical to let go a little. Life will surely get better after you finish this process.
Take action when the time is right. Timing is critical, particularly when it comes to filing for bankruptcy. Sometimes, you may need to file quickly; however, at other times, you should wait until the worst is over. Speak to a bankruptcy lawyer to determine what the ideal timing is for your personal situation.
Keep the concept of shame out of your head if you are contemplating bankruptcy. It is possible for those going through the bankruptcy process to feel unworthy, guilty or ashamed. Feeling like this will not help your situation and can actually do serious damage to your mental well-being. 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.
Bankruptcy is a hard thing to experience and it could create both emotional and mental stress. In order to keep things together and protect yourself from excess stress, be sure to hire a competent attorney. Do not hire based on cost. Your lawyer does not necessarily have to be the most expensive one; however, you should be certain of his or her qualifications and abilities. Get referrals from people you know who have been in your situation, check with the better business bureau and use free consultations to interview several people. Try attending a hearing to find out how bankruptcy attorneys handle the situation.
Don’t take too long when trying to decide whether you want to file bankruptcy. It can be difficult to ask for help, but as you wait, you accrue more debt. Take responsibility to talk with a bankruptcy expert sooner, rather than later. The longer you wait, the more difficult the situation can become.
Filing a claim doesn’t always result in losing possessions. Personal property is exempt from bankruptcy claims. You can keep your clothes, your furniture, your jewelery and your primary vehicle for instance. The personal items that you are allowed to keep will depend on your home state’s individual bankruptcy laws, your personal financial situation and the specific bankruptcy that you are filing for.
In most cases, bankruptcy isn’t really your only option. By using this article you will be well on your way to avoiding bankruptcy. Make the best use of this information to get your life back on track and prevent further damage to your credit.
