Although some people think filing for bankruptcy is only for losers, they are quick to dismiss the idea when they are faced with it. Often filing for personal bankruptcy happens as the direct result of changing conditions (e.g. the dissolution of a marriage or the loss of a job). If this situation proves to be yours, you can help yourself with the contents of this article.
When people owe more than what can pay, they have the option of filing for bankruptcy. If you’re in this situation, learn about the laws where you live. Each state has its own laws regarding personal bankruptcy. You may find your home is safeguarded in one state, while in another it isn’t. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. Other available options include consumer credit counseling. Bankruptcy is a permanent part of your credit, so before you make such a big decision, you might want to explore all other choices so that your credit history is affected as minimally as possible.
When it soaks in that filing for personal bankruptcy, don’t use all of your retirement funds, or all of your savings to resolve insolvency or pay creditors. You should make every effort to leave your retirement accounts untouched until your retire. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
Always be honest when filling out paperwork. Resisting the temptation to hide income or valuable assets from the bankruptcy trustee is a smart way to avoid potential complications, penalties, and the possibility of being barred from re-filing in the future.
You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. The Bankruptcy Code includes a list of the types of assets that are exempt from the bankruptcy process. Be sure that you study this list. Make yourself aware of any assets you have that could be seized. Failure to do this could cause some ugly surprises down the road when you discover that your valuables must be seized.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Since most attorneys offer free consultations, meet with a few attorneys before deciding who to hire. Only make a decision after you have met with several attorneys and all of your concerns and questions have been addressed. You don’t have to make your decision right after this consultation. If you’re unsure, don’t hesitate to talk to multiple bankruptcy lawyers.
Before you file, make sure you understand current bankruptcy laws. The laws are constantly undergoing changes, so you must stay on top of them if you are going to file for personal bankruptcy correctly. To find out about these changes, you can look at your state’s legislation website or contact their office.
Chapter 13
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. Should you choose Chapter 7, your total debt load will be erased. This type of bankruptcy ends any relationship you might have with creditors. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. You must know about the different bankruptcy types, and how each can affect you.
Since it is possible to obtain a free consultation from the majority of bankruptcy lawyers, meet with a few of them prior to choosing one. Ensure that your meeting is actually with the attorney, not with a paralegal or an assistant. People in these positions are unable to offer legal advice. Searching for the best lawyer will help you located the comfort you need during this time.
Unsecured Debt
If you are going to be filing for bankruptcy, think about filing Chapter 13. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. This type of bankruptcy protects your assets from seizure and lets you repay your credits over the course of a few years. This lasts for three to five years and after this, your unsecured debt will be discharged. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Spend time with loved ones. The process of bankruptcy can prove particularly brutal. It is lengthy, stressful and often leaves people feeling ashamed, unworthy and guilty. Avoidance of friends of family during the process is not uncommon. However, self imposed isolation will only make you feel even worse about the process and could even lead to depression. So, it is critical that you keep spending time with the ones you love, regardless of the current financial situation.
Bankruptcy should be considered only as a last option. There is no need to feel stress if you are faced with this situation. You can find valuable information by reading this article.
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