Embarking on a personal bankruptcy filing can be quite complicated. You need to know what type of bankruptcy you should file for based on your current finances and the type of debt you have. You need to know all you can about bankruptcy before you decide to file your petition. This article is a great place to start learning this information.
Ask yourself if filing for bankruptcy is the right thing to do. Debt advisors are one of the many other avenues you can consider. Bankruptcy is a permanent part of your credit, so before you make such a big decision, you might want to explore all other choices so that your credit history is affected as minimally as possible.
Don’t be afraid to remind your lawyer about important aspects of your case. Don’t assume that they’ll remember something important later without having a reminder. This is your bankruptcy and your future, so never be nervous about speaking your mind.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. The Bankruptcy Code includes a list of the types of assets that are exempt from the bankruptcy process. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Should you choose Chapter 7, your total debt load will be erased. This type of bankruptcy ends any relationship you might have with creditors. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. To make the wisest choice, you will need to understand the consequences of each of these two options.
It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. Considering several different lawyers can help find someone to trust.
Safeguard your home. Filing for bankruptcy will not always result in losing your home. If your home value has gone down, or if there’s a second mortgage, you might be able to keep it. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.
Think about all your options before pulling the trigger. Talk with a bankruptcy lawyer and ask about alternatives, such as debt consolidation or negotiating with creditors. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. Your lender can adjust your loan in many ways including extending the time you have to pay, reducing your interest rate, or canceling some of your late fees. Creditors would rather be repaid, however slowly, than have you declare bankruptcy.
Filing for Chapter 13 bankruptcy will not prevent auto loans or mortgages from being obtained. It is a little more difficult, though. Your trustee must approve any new loans. Document your budget to prove that you’re going to be able to make the payments. You also need to be prepared to answer questions about your need for the new item.
Filing for bankruptcy can cause stress. By hiring a competent attorney, you can alleviate some of that stress. Look beyond the fees a lawyer charges when you make your hiring decision. The cheapest attorney may not be the best, but the most expensive may not be the best either. Get referrals from those who have used a bankruptcy lawyer, talk to the bureau for better business, and take advantage of free consultations offered by most lawyers. You could even attend a court hearing to see how an attorney handles his case.
Every single piece of financial information you have needs to be studied and properly listed when filing a bankruptcy claim. Leaving out information either purposely or by mistake can prolong your petition, or have it dismissed completely. Even small amounts of money contribute to your overall financial picture, so do not exclude them. This type of income could come from doing odd jobs, extra cars or outstanding loans.
Before petitioning, you need to know what the personal bankruptcy rules are first. There are some clauses within bankruptcy that could cause you upsets. There are mistakes that may cause the dismissal of your case. This is exactly why it’s imperative that you take the time necessary in order to research what you can about bankruptcy. This will make the bankruptcy process much simpler.
Now you know that filing for bankruptcy requires a lot of thought. If you feel that it is your best option for your current financial state, you should contact an experienced bankruptcy lawyer who can advise you in this turning point in your life.
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