Although bankruptcy causes stress, it can help financially. There is the need for all your finances to be exposed, and multiple people scouring your financial information. But, you will also have the opportunity to get a fresh start, rid yourself of bill collectors and start rebuilding your credit. Here are some great tips for making bankruptcy easier.
Before filing for personal bankruptcy, make sure you are doing the right thing. Alternatives do exist, including consumer credit counseling. Bankruptcy has a negative effect on your credit reports, in that it is permanently there. Before you take this step, make sure all your options have been considered.
If you are going through a bankruptcy do not fall victim to guilt and pay off debts that you do not need to pay. You should always keep money saved for worse times. While dipping into your savings is likely to be necessary, avoid wiping it out completely to prevent leaving yourself with little financial security in the future.
Always be honest with the information you give about your finances. Not hiding any assets or income is essential for avoiding possible penalties and your ability to re-file at some point in the future.
Don’t avoid telling your lawyer specific details with your case. Don’t assume that he will remember something you told him weeks ago. Speak up. This is your life, and your future depends on it.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. There are plenty of companies who know how to take advantage of people who seem desperate, and it’s important to be sure your bankruptcy can go smoothly; take your time and choose someone you can trust.
Chapter 7
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. In Chapter 7 bankruptcy, your debts are all eliminated. With very few exceptions, the connections between you and your creditors will be severed. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. 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.
Talk to a lot of different bankruptcy lawyers; most of them will give you a free consultation. Never settle for speaking with a paralegal or an assistant. They are not trained, nor allowed, to pass on legal advice. By meeting with several attorneys through a free consultation you will be able to choose which attorney you feel more comfortable with.
Do what you can to keep your home. Bankruptcy filings do not necessarily mean that you have to lose your house. Depending on certain conditions, you may very well end up being able to keep your home. Otherwise, try looking into house exemptions that may let you remain in the home if you meet certain financial threshold requirements.
Be sure that bankruptcy really is your best option. It might be possible to consolidate some of your debt instead. Going through a bankruptcy is a long and stressful process. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. You have to make certain that you absolutely have no other choice.
Never forget that you still deserve to enjoy life while you go through the bankruptcy process. Filing is the most intensive step in the process, so afterwards it’s important to let go of some of your stress. It is essential to cope with this stress well, to prevent becoming depressed. Life is going to get better once you get through this.
Chapter 7
Before you make the decision to file Chapter 7 personal bankruptcy, take time to think about anyone it could affect. You will be freed of responsibility for debts that you share if you make a successful Chapter 7 filing. But, creditors will ask for the money from your co-debtor.
When you do file for bankruptcy, make sure you know your rights. Some debtors will try to tell you your debt with them can not be bankrupted. There are not many debts that can not be bankrupted, student loans and child support for example. If you know that a debt can definitely be bankrupted, yet the collector still harasses you, file a report with the attorney general in your state.
If you are going to file for bankruptcy make sure you are prompt. For some people, they tend to ignore their poor financial situation and just wishing it away, but that is only putting you in more danger. It is very common for personal debts to snowball suddenly. When this happens, terrible consequences, such as wage garnishment and foreclosure result. Once you’ve decided that you can’t manage your large amount of debt, it’s time to contact a qualified attorney.
Consider your options before deciding to file personal bankruptcy. For example, you may want to think about credit counseling. Various non-profit companies are out there to give you assistance. They will work with your creditors to get your payments lowered and your interest lowered as wll. Payments are then made to the creditor via the counseling service.
Before you file bankruptcy, consider how you will pay off your debts. When you’re planning on filing bankruptcy, your finances have to be in a state of limbo, for lack of a better term. Paying off creditors, transferring assets, and acting in any way other than financially strapped may result in a failed claim. Make sure you have a complete understanding of what is occurring prior to making any final decisions.
There are both benefits and harms involved, if you file for bankruptcy. No matter your reason for going through with it, remember that information is essential to the whole process. The information in this piece can make bankruptcy easier to handle. Use these tips smartly to make the best decision possible.
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