Bankruptcy may be hard for people to file for, but it may be necessary, sometimes. It will be easier to go through the process if you have a good idea of what is involved. Read the below article for excellent advice from people who have personally went through bankruptcy.
Generally bankruptcy is filed when a person is facing insurmountable debt. If you are in this position, you need to be familiar with the laws in your area. You will find that each state has their own bankruptcy laws. For example, whether or not you can keep your home, as well as what you need to do to keep it, is different for every state. It is important to understand the laws in your state before filing for bankruptcy.
Rather than checking online, try to get recommendations from friends or family about a suitable bankruptcy attorney. There are so many dime-a-dozen companies out there who make it a practice of preying on financial desperation. You need to make sure your bankruptcy goes smoothly, so find someone you know you can trust.
Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. For example, if your debt is small, try a type of consumer counseling program. Also, if you just contact your creditors and speak to them plainly and truthfully, the odds are good that you can negotiate a better payment structure that you can afford.
Chapter 7
You need to educate yourself on the differences between Chapter 7 and Chapter 13. Chapter 7, for example, will wipe away every one of your outstanding debts. All the things that tie you to creditors will go away. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Remember to only file for bankruptcy if you need to. Consolidating current debt could make it easier to manage. Filling for bankruptcy is a lengthy, stressful process. Having a bankruptcy on your record will hinder your ability to get credit in the future. Because of this, you should be sure that bankruptcy is your only option before you file.
Loved Ones
Spend time with loved ones. Bankruptcy proceedings can be extremely harsh. It can take a long time, take a great emotional toll and cause people to feel embarrassed and defeated. It is not uncommon for a person to feel the need to pull away from loved ones during the process. Self-imposed isolation can make you feel worse about it and can cause depression. It’s crucial to spend time with loved ones despite your present financial situation.
If you are making more money than you owe, bankruptcy should not even be an option. Sure, bankruptcy can get rid of that debt, but it comes at the price of poor credit for 7-10 years.
Don’t forget to enjoy your life once your finances get fixed. It’s not uncommon to be overwhelmed by the filing process. Make sure you take care of your part and let your attorney do the rest. Remember that your situation is going to improve after you file for bankruptcy.
When you are going through bankruptcy proceedings, it is sure to cause a great deal of stress. By hiring a competent attorney, you can alleviate some of that stress. Don’t let cost be the sole factor in who you hire. The cheapest attorney may not be the best, but the most expensive may not be the best either. Ask your friends, relations and acquaintances who have shared your experience to give you referrals to good lawyers. Consider attending a court hearing so you can witness how the lawyer operates.
Under no circumstances should you take out a huge cash advance on any of your open credit cards before filing for bankruptcy. This fraudulent practice is a demonstration of bad faith. Debts you incur this way will likely not be discharged in a bankruptcy, and you will still have to repay them.
Be careful how you pay off any debts prior to filing for personal bankruptcy. Find out from a bankruptcy attorney what a court needs to see as a cut off date for the last time you pay anyone you owe money to. You need to know the law before you decide to file for bankruptcy.
Don’t take too long when trying to decide whether you want to file bankruptcy. It’s hard to admit you need assistance, but the longer you decide to wait, the worse the debt can get. By consulting a professional, you will be able to get the advice that you need before everything gets too complicated.
It is possible that a bankruptcy might actually be smarter over the long term than struggling month to month with consistently late or missing payments. Of course, bankruptcy hurts your credit for up to ten years, but you can begin to re-build your credit immediately. Among the advantages of bankruptcy is that of a clean slate.
Credit History
Before filing for bankruptcy, it is important to still be smart with your finances. Avoid incurring new obligations or allowing existing debt to grow in advance of your bankruptcy. Judges may take into account your current credit history, in addition to your past credit history, when considering your bankruptcy case. You want to show them that you are doing everything you can to make your situation better.
No one is eager to file for bankruptcy, but in many cases, the alternatives are even worse. You should now have some excellent advice from people who have personally struggled with the bankruptcy process. Spending some time learning for others who have gone through the same thing reduce some of your stress.
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