When filing for bankruptcy, it is best not take the process lightly! Unless you realize every single little aspect of the proceedings to come, you might end up biting off more than you can chew. Use these tips to get on the right track. Making the decision to file for bankruptcy isn’t a light one. Use the information provided below to take the correct steps.
Ask yourself if filing for bankruptcy is the right thing to do. Debt advisors are one of the many other avenues you can consider. If you file for bankruptcy, a mark is permanently left on your credit. Therefore, before you do this, you should utilize all the other options that you have.
Do not use your retirement fund or savings to pay off creditors. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. 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.
It is essential that you are honest and forthright in the documentation you provide for your bankruptcy filings. 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.
Credit Card
Once you file for bankruptcy, you will have a hard time getting loans or credits. If so, apply for a secured credit card. Having a credit card of any type will allow creditors to realize that you’re attempting to work in the right direction to repair your credit. After some time passes they may be willing to offer you unsecured credit.
Learn how Chapter 7 bankruptcy and Chapter 13 bankruptcy differ from each other. Weigh all the information you can find on- and off-line to make an educated decision. If the information you read is unclear to you, take the time to go over the specifics with your lawyer before making a decision on which type you will want to file.
Chapter 13 Bankruptcy
Consider filing a Chapter 13 bankruptcy. If your source of income is regular and your unsecured debt is less than a quarter million, Chapter 13 bankruptcy is something you are able to file for. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Keep in mind that missed payments will trigger dismissal of your case.
If you are moving forward with a Chapter 7 bankruptcy, you need to learn how that can negatively affect anyone who shares loans with you. When you file under Chapter 7, you will no longer be legally responsible for any debts that were signed by yourself and a co-debtor. So, in short, if you file bankruptcy, but they do not, they will be held completely responsible for your joint actions.
Before you file for bankruptcy, make sure you understand your rights. Do not take debt collectors at their word when they tell you that a specific debt can’t be discharged through bankruptcy. Only a small number of debts are not dischargeable, including student loans and child support obligations. If you are told differently by a collector, research the information yourself. If you find they are in error, get the name of their company, phone number and any identifying info so you can report it to the attorney general in your area.
Going through bankruptcy is tough and can be mentally and emotionally draining. To have a reliable and trustworthy guide through the process, find a highly qualified attorney. Don’t let cost be the sole factor in who you hire. You do need someone who is costly, just someone who is good at what they do. Speak to those around you at work or social settings, who have dealt with this. Make the most of the BBB and consultations with attorneys to increase your knowledge and decision-making ability. If you want to know more about a specific lawyer, attend a court proceeding and see how the attorney handles herself.
Prior to filing, it is important that you know all about bankruptcy laws. For instance, somebody cannot transfer assets from a filer’s name up to a year after they file. Maxing out your credit cards immediately before filing is also illegal.
Do not omit any information about your finances, assets or debts when filling out your bankruptcy paperwork. Forgetting anything can cause a delay, or even a dismissal. You might think some asset or debt isn’t worth bothering with, but you should disclose it just to be on the safe side. Anything, like a job on the side, assets, like cars, and any outstanding loans should be included.
As you’ve read, you can file bankruptcy several ways. Don’t let all the information and regulations surrounding bankruptcy overwhelm you. Take you time to figure out everything and keep these tips in mind. The more level-headed you can remain throughout this process, the better the choice will be that you make.
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