Common emotions experienced by people going through bankruptcy are sadness, frustration, and anger. People sometimes assume incorrectly that they are up against a wall, and there’s no way out. However, bankruptcy isn’t a process that will forever hurt your future.
The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. Study the laws in you state to learn what you need to do and what your options are. Different states use different laws when it comes to bankruptcy. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. Make sure you know the laws where you live before you file.
Think through your decision to file for bankruptcy carefully before going ahead with it. There are other options available, such as credit counseling for consumers. Your credit record will be harmed by a bankruptcy filing, and therefore prior to making such a decision, it is wise to investigate other options in order to minimize the damage you suffer.
Retirement Accounts
Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. Retirement accounts should never be accessed unless all other options have been exhausted. Using your savings is necessary, but decimating it and leaving yourself dangling with no future financial security is not a good idea.
Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. Do not hide any income or assets or go on a spending spree before filing for bankruptcy: the court will find out and will not have a positive opinion of you.
You may still have trouble receiving any unsecured credit after a bankruptcy. If so, apply for a secured credit card. By doing this, you will be letting people know that you want to fix your credit score. After a while, you may be able to get unsecured credit again.
Try going to a personally recommended bankruptcy lawyer instead of using a phone book or the Internet. There are many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.
If you aren’t totally honest about your assets when filing a bankruptcy petition, you could get into serious trouble. Whomever you use to file with must know everything there is to know about your finances, both good and bad. Don’t withhold information, and create a smart way of coping with the reality of the situation.
When you do meet with a lawyer make sure that they answer all of your questions and that they do not charge you for consultation alone. It is a good idea to consult several attorney before deciding on one. Don’t choose a lawyer until your questions about bankruptcy are sufficiently answered. You need not decide right away. This allows you time to speak with numerous lawyers.
Be sure to enlist the help of a lawyer if you’re going to be filing for bankruptcy. Personal bankruptcies are detailed and complex processes, and you may miss something that costs you money. Choose an attorney versed in personal bankruptcy to make sure you don’t make mistakes.
Weigh all of your options before declaring bankruptcy. One example would be that a consumer credit program for counseling if you have small debts. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Make sure your home is safe. It isn’t inevitable that you will lose your house when you file for bankruptcy. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. You could also check out the homestead exemption. This lets you continue living in your house, depending on whether you meet certain financial requirements.
Don’t file bankruptcy if you can afford to pay your debts. Though bankruptcy may appear to be a good way to escape your debts, it does affect your credit negatively for a fairly long time.
Once the initial filing period is over, ensure that you are getting out and enjoying life. Filing for personal bankruptcy can be very stressful for the debtor. That stress can cause depression, if you don’t take care to avoid it. Once your petition is in the hands of the judge, all you can do is wait.
Chapter 7
Before filing for bankruptcy under Chapter 7, make sure that you consider the implications this will have on any of your co-debtor, who are usually family members, close friends or business associates. When you file a Chapter 7, your debts will be dissolved. However, creditors can demand co-debtors pay the amount in full.
After reading this article, you should be able to see that personal bankruptcy isn’t so bad. In the beginning, it can be hard, but there is no reason why bankruptcy should defeat you. Making use of the tips you found here will allow you to heal your financial situation.
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