It can be a difficult process to file for bankruptcy. All types of bankruptcy exist. The kind that you select depends on your finances and your debt. You should learn all you can about bankruptcy before filing. This article will give you some of the important facts about bankruptcy.
Credit History
Try to make certain you are making the right choice prior to filing your petition. There are plenty of other options open to you, like consumer credit counseling. Bankruptcy is a serious negative on your credit history so make sure you have no other options before you file. It is important to keep your credit history as positive as possible.
It should go without saying, but refrain from lying in your bankruptcy filings. Lying on your filing can cause dire consequences such as: delays, penalties, being prevented from re-filing, or even jail time.
Credit Cards
After a bankruptcy, you may not be able to receive any credit cards. If this happens to you, think about applying for a couple of secured credit cards. This will prove that you want to improve your credit score. After a certain time, you will then be able to acquire credit cards that are unsecured.
Try to get a bankruptcy lawyer that your friends recommend, as opposed to someone that you find from the Internet or yellow pages. To handle your bankruptcy, you need a trusted attorney, not a shady one that is out to take your money.
Brush up on the latest bankruptcy regulations before you decide whether or not to file. If you want to file for bankruptcy successfully, it’s important to review the latest applicable laws. They tend to change frequently. Keep up with your current state’s laws and regulations to figure out what steps you should take.
Before declaring bankruptcy, ensure that all other options have been considered. If your debt is relatively low, you may be able to manage it with credit counseling. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Protect your house. Filing for bankruptcy does not always mean you will end up losing your home. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
Understand the differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. Learn the benefits and drawbacks of each type before deciding which is right for you. If the information you read is unclear to you, take the time to go over the specifics with your lawyer before making a decision on which type you will want to file.
If you are making more money than you owe, bankruptcy should not even be an option. Bankruptcy may seem to be the easy way out, but your credit report will show the scar for the next ten years.
Act when the time is right. They say timing is everything, and this rings true when filing for bankruptcy. There are situations in which it is in your best interest to file immediately, but other times it is advisable to wait. Speak to a bankruptcy lawyer to determine what the ideal timing is for your personal situation.
Going through bankruptcy is tough and can be mentally and emotionally draining. If you want to protect yourself from stress, see to it that you hire a good attorney. Try not to pick a lawyer based on cost alone. Choosing a lawyer should be based on finding one with a proven track record who can give you the help that you need. Get referred from others who’ve been in the same situation, check the BBB, and interview several people through free consultations. If you want to know more about a specific lawyer, attend a court proceeding and see how the attorney handles herself.
Many people who file for bankruptcy vow to stop using credit cards. This is actually a poor idea because credit helps to build good credit. You will not be able to get your credit back to a respectable score if you don’t use credit. Start with one single credit card, and rebuild your credit once more.
Filing for bankruptcy does not mean that you lose all of your assets. Personal property can be kept. Things like jewelry, clothes, and electronics are included in this category. Your current state’s laws, deciding between Chapter 7 or 13, and your current financial position will determine just how much you get to keep.
If you think you have to file a petition for bankruptcy, get a lawyer who specializes in bankruptcy. The complexities of the process of filing, court proceedings and other issues can best be handled by a competent lawyer. Your lawyer can also show you how to fill out the paperwork, file it properly and be there to answer any questions you may have.
Even if you start a new job prior to declaring bankruptcy, do not change your plans! Your decision to file may still be justified. The time frame of your filing may be critical. If you file your bankruptcy before you receive new income, your ability to repay will be evaluated as if you did not have a job.
Some attorneys have a free phone service where creditors can be referred when they try to contact you in regards to a delinquent account. By contacting the phone number that you supply, your creditors can get confirmation that a bankruptcy filing incorporating their debt is underway. This can stop collectors from harassing you at home.
As you can see, filing for bankruptcy is a serious decision that must be considered carefully before you make it. If bankruptcy is sensible option for you, a good and experienced bankruptcy attorney is a must have to help you begin the process of starting your financial situation anew.
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