When you’re indebted to people or institutions, it’s only a matter of time before they show up at your door to collect. Sometimes literally. When your debt situation gets serious enough, you may want to consider personal bankruptcy as a way to save yourself. Keep reading to gain useful insight about navigating the process.
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. Good or bad, you must tell your bankruptcy attorney everything about your financial situation. Being honest is both the right thing to do and, moreover, it is required by law.
Chapter 7
You need to educate yourself on the differences between Chapter 7 and Chapter 13. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. Any ties you have concerning creditors will definitely be dissolved. A Chapter 13 filing involves a repayment plan, though. Typically, you will make a partial payment against your debts over the next 60 months before the balance of the debts is lifted. Take the time to learn more about these different options so you can make the best decision possible.
Many bankruptcy attorneys offer the first consultation with no charge, so consult with several before deciding on one. Always ensure that the person you meet with is a real lawyer, not a legal assistant or paralegal. These people can’t give legal advice. Looking for an attorney will help you find a lawyer you feel good around.
Protect your house. Bankruptcy filings do not necessarily mean that you have to lose your house. You can still keep your home, it just depends on your specific situation and the value of your home. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
Learn about teh differences between Chapter 13 and Chapter 7 bankruptcy. There is a wealth of information online about each type of bankruptcy and their respective pluses and minuses. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
Spend time with loved ones. Going through bankruptcy is difficult. It can take a long time, take a great emotional toll and cause people to feel embarrassed and defeated. Many people tend to hide until their process is completed. This isn’t true though because when you isolate yourself you will just start to feel worse and may become depressed. Time spent with people who care about you can give you new perspective on your financial situation.
Never forget that you still deserve to enjoy life while you go through the bankruptcy process. So many people become stressed when they file. The stress of dealing with bankruptcy could cause you to fall into a depression, unless you take steps to take care of yourself. Life will get better; you just need to make it through the bankruptcy process.
You may want to see if you can get lower payments on your vehicle if you want to keep it. Chapter 7 usually can help payments be lowered. There are certain requirements and restrictions such as a loan that has a high interest rate, cars purchased 910 days before you file, and a steady job history that can help you keep your vehicle.
Before declaring bankruptcy, it is important to know your rights. Occasionally, debt collectors will attempt to convince you that your debt isn’t eligible for bankruptcy. Only a few debts, including child support and tax liens, are ineligible for bankruptcy. If you are told by a debt collector that your debts are not dischargeable, make a record of your conversation and report the individual to the proper state authorities.
Don’t wait to file for bankruptcy. Some people just ignore the trouble they are in financially and think it will go away later. This is not a good decision. If you have failed to make payments for several months but have continued making purchases on credit, your petition may be denied. Once you’ve decided that you can’t manage your large amount of debt, it’s time to contact a qualified attorney.
Do not pay off debts blindly before you file a personal bankruptcy. The bankruptcy code stipulates that you cannot make certain payments to creditors or family for specified periods of time before filing. Learn the rules regarding bankruptcy before making any final financial decisions.
When you file for bankruptcy, you need to list every single debt that you want wiped out. Anything not listed will not be a part of the discharge. It is up to you to ensure all things that need to be taken care of are written down, otherwise you will be stuck paying on things that weren’t discharged.
Of course you could decide to file bankruptcy, but learn of your other choices first. You should also know that some debt consolidation firms are little more than scams that will only hurt your financial situation further. Keep the tips you read here close by and refer to them as you figure out your financial situation.
