Making the decision to file for bankruptcy isn’t an easy one, but sometimes it can be the only way out of a mountain of debt. Before filing for bankruptcy, it is important that you fully understand what it means and what is involved in the bankruptcy process. Keep reading for some solid wisdom from people who have themselves gone bankrupt.
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. Every state is different when it comes to dealing with bankruptcy. Your house is safe in certain states; however, in other states, it isn’t. Be aware of bankruptcy laws before filing your claim.
Try to make certain you are making the right choice prior to filing your petition. Alternatives do exist, including consumer credit counseling. Your credit record will be harmed by a bankruptcy filing, and therefore prior to making such a decision, it is wise to investigate other options in order to minimize the damage you suffer.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. Do not hide any income or assets or go on a spending spree before filing for bankruptcy: the court will find out and will not have a positive opinion of you.
Before filing for bankruptcy, hire a qualified attorney. It is difficult to make all of the necessary decisions yourself, and expert guidance will be helpful. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.
There are differences between Chapter 13 bankruptcy and Chapter 7; be sure to familiarize yourself with both. Spend time researching the advantages and disadvantages of filing for each one of these. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
If you are considering filing for personal bankruptcy, be certain that this is really the right course of action for you. It might be possible to consolidate some of your debt instead. Bankruptcy is a long process that can be stressful. The future of your credit will be greatly affected. Thus, you must make certain that bankruptcy really is the only viable solution to your problems.
If your income exceeds your obligations, you should not seek bankruptcy protection. Filing for bankruptcy can really damage your credit in the long run, by staying on your report for up to ten years.
Investigate other alternatives before resorting to 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 looms, think about getting your loan plan modified. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
After you have finished with the initial process of filing, you can relax and take a breather. Many people feel a lot of stress while they work through the bankruptcy process. The stress of dealing with bankruptcy could cause you to fall into a depression, unless you take steps to take care of yourself. Your life will see improvement after you get past the bankruptcy.
Filing for Chapter 13 bankruptcy will not prevent auto loans or mortgages from being obtained. However, it will be a longer and more arduous task. You will need to secure the trustee’s approval for any new debt obligation. You will need to make a budget and prove that you will be able to afford your new loan payments. An explanation of need will also be necessary.
Bankruptcy is a difficult time that always leads to lots of stress. If you want to protect yourself from stress, see to it that you hire a good attorney. Do not solely use cost to determine whom to hire. It is not necessary to engage the lawyer who charges the highest fees; all you need is a lawyer of high quality. 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. Attending a court hearing will give you experience as to how lawyers handle these cases.
It is important to file bankruptcy before its too late. A lot of people ignore their financial problems, thinking they are going to go away; that is a big mistake. It is very common for personal debts to snowball suddenly. When this happens, terrible consequences, such as wage garnishment and foreclosure result. Consider all possible options before filing bankruptcy.
Be certain you are totally aware of the laws of bankruptcy before you file. For example, it is forbidden for an individual to transfer any assets away from the name of the filer within the twelve months preceding filing. Not only that, but the filer cannot lawfully accrue additional debt just prior to filing.
Nobody really wants to file for bankruptcy but it sometimes is just something they have to do. Now that you’ve read over this article, you learned some things that are from others who have experienced this too. You will find this experience less difficult knowing that others have done it before you and survived by following these tips.
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