Bankruptcy is a decision that should be considered carefully before undertaking. If you take a few moments to check out the different tips and tactics listed in the text below, you can begin to realize how to navigate your way through the tough mine field that is bankruptcy. It’s important that you gather as much info as possible before filing.
Before making the decision to file for bankruptcy, be sure to do some research and learn all you can about the subject. There are many websites available that offer this information. The United States DOJ, the NACBA, and the ABI all have useful information. The more you know, the more you’ll knwo that you’ve made a wise decision and the you’re making sure your bankruptcy goes as smooth as possible.
If you are going through a bankruptcy do not fall victim to guilt and pay off debts that you do not need to pay. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. You may need to use some of your savings; however, you should not use all of your savings. Remember that you must safeguard your future financial security.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. The Bankruptcy Code has lists of various asset types that are exempt during the process. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. If you don’t read it, you could have nasty surprises pop up later due to your prized possessions being seized.
Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. There are numerous programs out there that may assist you with your debt, like a credit counseling program, a nonprofit group, government assistance, etc. Also, you could try to get your payments lowered on your own. If you decide to do this, get a copy of anything you agree to.
Chapter 7
You need to educate yourself on the differences between Chapter 7 and Chapter 13. Under Chapter 7 type bankruptcy, all debts are forgiven. You will be removed from any contracts you have with your creditors. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Look into filing Chapter 13 bankruptcy. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. The window for Chapter 13 repayments is typically 3-5 years. At the end of this time, any unsecured debt is discharged. Remember that missing a payment to the plan will result in your case being dismissed.
Know your rights when filing for bankruptcy. There are unscrupulous debt collectors who may suggest that your obligations cannot be included in a bankruptcy. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If the debt collector tries to tell you that your debts, which do not fall into those categories, cannot be bankrupted, take a note of it, look up the debt type, and report them to your state’s attorney general office.
Be decisive at the correct moment in time. Timing is critical, particularly when it comes to filing for bankruptcy. For some people, filing right away is best, however for others, waiting a while is best. Discuss your specific situation with a bankruptcy lawyer to find out when would be your best time to file.
Bankruptcy is a hard thing to experience and it could create both emotional and mental stress. If you want to protect yourself from stress, see to it that you hire a good attorney. Try not to pick a lawyer based on cost alone. Hire the best attorney you can afford, not the one who charges the most. Speak with trusted people, check the BBB and take advantage of the free bankruptcy attorney consultations. If you wish, you can attend a bankruptcy hearing and witness your attorney in action.
Don’t drag your feet when it comes to filing bankruptcy. The judge reviewing your petition will consider your recent behavior, purchases, income and payments when making a decision. Debt can become a big problem rapidly, and if you fail to handle it, you can face foreclosure or garnishment of wages. As soon as you realize your debts far outweigh your income, call a bankruptcy lawyer to talk about what your choices are.
Bankruptcy isn’t simple and immediate. Filing for bankruptcy is a very involved and precise process. Use what you learned in this article to straighten your finances and improve your situation.
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