When debt begins to pile up, even the most responsible among us can panic and quickly lose control of the situation. Debt can quickly accumulate with a speed you aren’t prepared for. If you’re not careful along the way, debt can be a complicated process to get out of. In some situations, filing for bankruptcy might be the best option.
Bankruptcy Laws
Most people that file for bankruptcy owe a lot of money that they could not pay off. If you are in this position, you need to be familiar with the laws in your area. Each state has their own bankruptcy laws. For example, the personal home is exempt from being touched in some states, but not in others. Familiarize yourself with the bankruptcy laws of your state prior to filing.
Do not use your retirement fund or savings to pay off creditors. Avoid touching your retirement accounts whenever possible. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
Never shirk on the truth in your petition for bankruptcy. Don’t hide income or assets from your lawyer or the bankruptcy trustee or you may find yourself in legal trouble.
Be honest when filing for bankruptcy. Don’t hide liabilities or assets, as they’ll come back and haunt you. Whoever provides your legal consultation must be privy to all of your financial information. Never hide anything, and make sure you come up with a well devised plan for dealing with bankruptcy.
Chapter 13
Look into filing Chapter 13 bankruptcy. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
If you can afford to pay your bills, bankruptcy is not a wise option. You should know that filing for bankruptcy will ruin your credit score for at least ten years and that improving your credit score will be expensive.
Rest assured, when you file for Chapter 13 bankruptcy, you still have the ability to take out mortgage and car loans. Of course, it’s difficult. You have to meet with your trustee to get approval for the new loan. Draw a budget up and show how you can pay the newer loan payment. You will also need to explain why it is necessary for you to take out the loan.
Bankruptcy is a hard thing to experience and it could create both emotional and mental stress. The best way to lessen this stress is to employ a lawyer, who can handle most of it for you. Don’t hire based solely on cost. The cheapest attorney may not be the best, but the most expensive may not be the best either. Do not choose an attorney until you have interviewed them, checked with the better business bureau and checked their standing with the bar association. You might be able to view a court hearing. You might be able to watch how your prospective attorney handles the case.
Before you decide to file, make yourself aware of the laws about bankruptcy. For instance, a filer cannot transfer assets to someone else for at least a year before filing. Also, it is illegal to load up your credit cards with debt right before filing occurs.
Long before you file any paperwork dealing with bankruptcy, your first step should be learning the rules and the process. The bankruptcy code contains several provisions that can raise serious obstacles in your case. Making mistakes can have an effect on the outcome of your case. Before you go ahead, devote a little time to research and the topic of personal bankruptcy. If you take care of this now, you can avoid problems going forward.
Do not take too long deciding that it is time to declare bankruptcy. Filing for bankruptcy is a hard decision to make but if you wait too long, your situation will get worse. A qualified bankruptcy lawyer can give you advice about filing for bankruptcy and help you weigh other options.
If you’re continuously making delinquent payments and are constantly missing payments, filing for bankruptcy might just be a kinder, gentler solution for you. Bankruptcies can remain on your credit reports for 10 years, you can jump right into repairing your credit. The key to a bankruptcy is the fresh start you will get from it.
There are often times when you feel that you have very little control over what is happening to you. In this article, you were presented with some tips on regaining control of your money and debt. It is time to take action and fix your problems.
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