Filing for bankruptcy is a huge decision in anyone’s life. Before you go through with it, you need to understand the gravity of the situation. It is crucial you educate yourself on the entire bankruptcy filing process. Apply the ideas in this piece to get started in the right way. Research will help you deal with the tough decisions you need to make.
It’s not uncommon to learn soon after bankruptcy that you are unable to get an unsecured credit card easily. If you find yourself in this situation, you may want to think about getting a secured card or two. This will demonstrate that you’re seriously trying to restore your credit. After a time, you are going to be able to have unsecured credit cards too.
Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. The Bankruptcy Code contains a list of various assets that are excluded from bankruptcy. Make sure to review the list before filing a claim so you know if your valuables will be subject to seizure. If you neglect this important step, you might be blindsided when a possession that is important to you is taken to repay creditors.
Don’t hide assets or liabilities when filing for bankruptcy. Your bankruptcy lawyer has to know every detail of your finances, whether bad or good. Do not hold back anything, and form a sound plan to make peace with your reality.
Put forth the effort to grasp the distinctions between Chapter 7 and Chapter 13 bankruptcies. Research both types of bankruptcy online, and weigh the positives and negatives each would offer you. Do not hesitate to have your lawyer explain any details that seem difficult to grasp. This will help ensure you make the right choice when filing.
Chapter 13
Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. Bear in mind that if you miss a single payment that is due under your plan, the entire case will be dismissed by the Court.
Do not forget to enjoy life a little once you get through the initial filing process. Filing for personal bankruptcy can be very stressful for the debtor. This stress may lead to something worse like depression, so do what you can to fight that from happening. Once your petition is in the hands of the judge, all you can do is wait.
Talk with your lawyer about getting lower payments for any car you wish to keep. In many cases, Chapter 7 bankruptcy can lower your payments. If you meet the criteria specific to your state, it may be a good option to consider.
If you have filed for Chapter 13 bankruptcy, you will still be allowed to apply for and receive a mortgage or car loan. It is more difficult. Your bankruptcy custodian will need to approve the loan. You will need to come up with a budget and show that this new loan payment schedule is doable. Also, you need to be ready to say why you’re going to need the item.
Make sure you understand your rights as you file for bankruptcy. Some debt collectors like to say that you cannot file for bankruptcy on these debts. You should know that only a few debts cannot be erased, including student loans and child support. If a collector tells you your debt won’t be discharged in your bankruptcy and you know that it will, report the collector to the attorney general’s office in your state.
Avoid using bankruptcy as a last resort. It is all too common for people to hope that their financial difficulties will disappear if they don’t give them any attention. It doesn’t take long for debt to become unmanageable, and not taking care of it could eventually lead to wage garnishment or foreclosure. Once you are aware that your financial situation is not manageable any more, your best bet is to speak with a bankruptcy attorney and find out what he or she recommends.
As you’ve read, you can file bankruptcy several ways. Do not be overwhelmed by all the information. Take time to think about what you have read here. When you think things through, you make good decisions in life.
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