No one wants to need to go through the process of filing for bankruptcy. Changing circumstances often creates a situation in which there’s no better choice, therefore, knowing how to properly deal with it the right way is important. If you discover that you are faced with bankruptcy, you can help yourself with the knowledge provided below.
It is important that you increase your knowledge on personal bankruptcy by reviewing websites that provide reliable information. The United States Department of Justice and American Bankruptcy Institute are both sites that provide free advice. The greater your body of knowledge, the better prepared you will be to make the decision of whether or not to file and to make certain that if you do file, the process is a smooth one.
Before filing for personal bankruptcy, make sure you are doing the right thing. There are plenty of other options open to you, like consumer credit counseling. 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.
Getting Unsecured Credit
Be aware that getting unsecured credit is going to be tough once you’ve gone through bankruptcy. If that’s the case, it is beneficial to apply for one or even two secured cards. Using a secured card not only helps to rebuild your credit, but it also keeps you from going more in debt with credit card bills. Once you’ve built up a history of on-time payments, you may start getting unsecured credit again.
The two main kinds of bankruptcy are Chapter 7 and Chapter 13. Make sure you understand them so you know what is best for you. If Chapter 7 is what you file, your debts will get eliminated entirely. All the things that tie you to creditors will go away. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. Both options have advantages and drawbacks, so do your research before deciding.
It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. By law, paralegals and assistants can not give legal advice, so be sure that you are meeting with an actual attorney. Taking the time to compare lawyers will ensure that you get a person that you can be yourself around.
Remember to only file for bankruptcy if you need to. You may find consolidating your debt may be simpler. Declaring bankruptcy is a very involved process that can cause a good deal of anxiety. It will also make it tough for you to secure credit after your filing is complete. This is why it is crucial that you explore your other debt relief options first.
If you make more money than what you owe, filing for bankruptcy is not a good option. Bankruptcy may seem to be the easy way out, but your credit report will show the scar for the next ten years.
It is in your best interest to be abreast of your rights in petitions for bankruptcy. Collectors may try to convince you that your debt can’t be discharged. There are few debts that can’t be discharged. If a collector uses this tactic about debt that can, in fact, be discharged through bankruptcy, report the collection agency to the attorney general’s office in your state.
Credit Cards
Most people that file for bankruptcy try not to use credit cards again. This is not a good decision on their part because credit cards help in building good credit. If you do not rebuild your credit rating, you will not be able to buy a car or a home on credit again. Start with just one card in order to move your credit in the direction you want it to go.
Remember that just because you have filed for personal bankruptcy it will not cause you to lose everything you own. Personal property is exempt from bankruptcy claims. Some included items are: electronics, household furnishings, clothing and even jewelry. The laws of your state and the kind of bankruptcy for which you are filing, coupled with your financial situation, will determine what personal property you are allowed to retain. Additionally, the retention of large assets, such as your automobile and your home, is determined by these considerations.
When you are forced to file for bankruptcy, you should have some excellent knowledge on what to do. The process will be much simpler if you are well-informed. The article you just read have you some of this advice, meaning you can deal with your situation much better.
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