Whatever leads you to bankruptcy is a sad tale, but that need not mean that’s the only story to tell for the rest of your life. The benefit of filing for bankruptcy is that you have a new beginning. Read this article to learn how bankruptcy is a constructive, not destructive, process in reshaping your financial situation.
Keep with what you have decided to do. Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. If you have any property in repossession that was taken less than three months before filing for bankruptcy, then there are good odds that you can get your property back. Consult with a lawyer who can help you along with filing the petition.
Chapter 13 Bankruptcy
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. If Chapter 7 is what you file, your debts will get eliminated entirely. Any ties you have concerning creditors will definitely be dissolved. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Consider filing for Chapter 13 bankruptcy. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Keep in mind that even missing one payment can be enough for your whole case to get dismissed.
Don’t isolate yourself from family and friends. The process of bankruptcy can prove particularly brutal. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. Lots of people think they need to hide from everyone until this is all done. Do not isolate yourself or you will put yourself at risk for depression. So, it is critical that you keep spending time with the ones you love, regardless of the current financial situation.
You may want to see if you can get lower payments on your vehicle if you want to keep it. Filing under Chapter 7 is usually a good way to lower your payments. You need to have bought your car 910 days before you file, have a loan with high interest and you’re also going to need a good work history.
Carefully consider filing for bankruptcy on loans that have a co-signer, especially if that co-signer is a business associate, close friend or relative. Once you have filed Chapter 7, you, by law, are not responsible for any of your debts that also include your co-debtor. Your creditors can then come after your co-debtor for full repayment of the debt.
When you file for bankruptcy, you should be very aware of your rights. Some debtors will try to tell you your debt with them can not be bankrupted. What you can’t file on is very small, like student loans or child support payments. If you know that a debt can definitely be bankrupted, yet the collector still harasses you, file a report with the attorney general in your state.
Make sure that you disclose every bit of financial information on your bankruptcy petition. If you do not do so accurately, your petition could be dismissed, or at the very least delayed. The most meaningless, innocuous finance or expenditure needs to be listed when you file a claim. This may include secondary employments, vehicles you own and loans you still owe money on.
Don’t just assume bankruptcy is the right option, especially if you have not considered others. One option to consider is credit counseling. There are many different non-profit companies that can help you. They can help you to lower both your debts and interest owed to creditors. You can even pay your creditors through them.
After filing for bankruptcy, many individuals vow they will avoid the use of credit cards and all forms of credit. This isn’t necessarily a good strategy to follow because good credit is established by getting, and handling, credit responsibly. You have to reestablish your credit once you hurt it, this way you can still position yourself to take out things, such as home or car loans, in the future. Start with just one card in order to move your credit in the direction you want it to go.
As stated earlier, anything that leads someone to bankruptcy is not a good story. Yet after bankruptcy, you can be happy again. In fact, if you apply the ideas and advice given in this article, you can truly make bankruptcy a turning point in your life towards better days.
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