Bankruptcy is a tough decision, one that should be given a lot of thought. Go over the advice in the following paragraphs to get an idea of what you’re in for, and to learn what you should know before you decide whether or not to file. All knowledge that you can gain at this point will only help you on the difficult road ahead.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. You have other choices, including consumer credit counseling. Bankruptcy leaves a permanent mark on your credit history, so before you take such a large step, you want to exhaust all other options so that the future effects on your credit history are as minimal as possible.
Be sure to remind your lawyer if it seems that some details of your situation are forgotten. Don’t assume that they will recall every detail that you go over with them without a friendly reminder. Speak up, because it is your future on the line.
Any bankruptcy consultation should be free of charge. Most attorneys offer free initial consultations, and you should take advantage of the chance to interview multiple practitioners. The lawyer who properly answers your questions is the one you should hire. There is no need to feel rushed to decide to file after you talk with your bankruptcy lawyer. If you’re unsure, don’t hesitate to talk to multiple bankruptcy lawyers.
If you’re going to file bankruptcy, you need an attorney. With all the ins and outs of bankruptcies, it can be hard to grasp all the knowledge. Talk to a bankruptcy lawyer, they can help clarify anything that you might have confusion with.
Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. For example, you may want to consider a credit counseling plan if you have small debts. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
Chapter 13
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. All debt will be eliminated with Chapter 7. All creditor relationships will be severed. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. Look into both types of bankruptcy before deciding which one would suit your particular needs.
Always protect your house. Filing for bankruptcy does not guarantee that you will lose your house. You might be able to keep your home, for instance, if you have two mortgages or if your home has lost its value. Otherwise, try looking into house exemptions that may let you remain in the home if you meet certain financial threshold requirements.
Don’t file for bankruptcy the income that you get is bigger than your bills. The cost to your credit history far outweighs the simplicity of the easy-out bankruptcy. This is a hard pill to swallow for many.
If you filed for Chapter 13 bankruptcy, you can still get a mortgage or a car loan. It is just tougher. You need to contact your trustee so you can get approved for a new loan. Create a budget and prove you can afford a new loan payment. Be ready to justify the purchase that you need the loan for, too.
Before you decide to file, make yourself aware of the laws about bankruptcy. For instance, you may not be aware that a filer is forbidden from transferring assets from his or her name for one full year before the petition is filed. In addition, it’s unlawful for a filer to acquire more debt on their credit cards before they file.
Avoid making payment that might interfere with your filing. Some bankruptcy rules do not allow you to send money to creditors within three months of filing; this can extend up to a full year if a loved one is involved. Do not make a decision about filing until you are aware of all the current rules regarding bankruptcy.
Once your bankruptcy is discharged, wait two months, then order your credit report from the three major bureaus. Be sure these reports are accurate and correct in regards to all of your closed accounts. If there are any errors, make sure that you take action to resolve them as soon as possible.
This article has probably helped you see that bankruptcy is a process that involves a lot of planning. Several steps must be completed, and completed accurately. Keep this article’s advice in mind and you will probably stand a better chance of laying all the groundwork for your own bankruptcy properly.
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