It can be challenging to face the prospect of bankruptcy. When you’re constrained financially, your options become limited, in general. Your credit score has been damaged and it can be difficult to get loan approvals. However, although difficult, it is not impossible to secure a loan.
Be certain you understand all you can about bankruptcy by researching reputable sites that offer good information. The U.S. DOJ, the NACBA, and the ABI all have useful information. The more you know, the better equipped you’ll be to make the wise decisions needed for a successful bankruptcy.
Be honest when filing for bankruptcy, because hiding liabilities or assets can only cause trouble to you. It is important that you are completely transparent, showing everything financial that needs to be known. Lay everything out on the table so that you and your lawyer can devise a plan to get you out of this mess.
Don’t throw in the towel. Filing a bankruptcy petition might facilitate the return of your property, including cards, electronics or other items that may have been repossessed. If the property you own has been repossessed under 90 days before the bankruptcy filing, you may still be able to get it back. Get the advice of a qualified attorney who can advise you about ways to accomplish this.
Seek a less serious option prior to filing for bankruptcy. If your debt is relatively low, you may be able to manage it with credit counseling. You could even negotiate for lower payments. However, you should ensure that you always obtain a written record of all the changes to your debt that you’ve agreed to.
A free consultation is standard for bankruptcy attorneys, so shop around before settling on one. Be certain you talk to the lawyer, himself, instead of a paralegal or assistant; those people aren’t allowed to give legal advice. Interviewing multiple attorneys is a good way to find the best fit.
Take steps to ensure your home is protected. It isn’t inevitable that you will lose your house when you file for bankruptcy. Depending on whether the value of your home has decreased or if you have a second mortgage on the home, you may end up keeping it. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
While going through this process, spend more time with friends and family. Going through bankruptcy is difficult. It can take a long time, take a great emotional toll and cause people to feel embarrassed and defeated. It can be hard to face the world while the bankruptcy process is taking place. Isolating yourself from your loved ones can lead to feelings of depression. So, even though you may be ashamed of the situation you are in, you should still be around those you love.
Credit Score
Avoid filing for bankruptcy if you make more money than your monthly bills. You should know that filing for bankruptcy will ruin your credit score for at least ten years and that improving your credit score will be expensive.
If you meet certain requirements, you may be able to get a lower monthly payment on your financed vehicle. A lot of the time, your payments may be lowered due to Chapter 7 bankruptcy. There are a few requirements that you have to meet to be eligible, though. You have to have bought the car more than 2.5 years ago, your loan’s interest rate needs to be over a certain amount, and your employment history has to be good.
Bankruptcy is a step that many people have to take, and as you can see, it’s not a permanent black mark. By demonstrating responsible financial management, (saving money, making payments on time) you can impress creditors and rebuild your credit rating. So start saving and see how much of a change it makes when people view you the next time you go in for a car or home loan.
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