Personal bankruptcy–the process can be complex and confusing. There are multiple ways you can file for bankruptcy, and the one that best fits you will depend on your financial situation and what you owe. It is important to learn about personal bankruptcy before you make the decision to file. The following tips will help you understand bankruptcy.
Consider all options before deciding to file for personal bankruptcy. Look into other options, such as consumer credit counseling. Your credit score will be forever effected by bankruptcy, which is why you should do everything else in your power to resolve matters first.
Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. Unless there is no other choice a retirement account should not be used. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.
Unsecured Credit
You may still have trouble receiving any unsecured credit after a bankruptcy. If this happens to you, think about applying for a couple of secured credit cards. This demonstrates to creditors that you are making a good faith effort to repair your credit. After a while, you may be able to get unsecured credit again.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. There are plenty of companies who know how to take advantage of people who seem desperate, and it’s important to be sure your bankruptcy can go smoothly; take your time and choose someone you can trust.
Be aware of recent changes, if any, in the bankruptcy code. This area of law is in constant flux and it is imperative that you know where the law stands at the time you file for your bankruptcy. To know what these changes are, go to your state’s website or contact the legislative offices.
Avoid filing for bankruptcy if you make more money than your monthly bills. Bankruptcy might seem like a good way to get out of paying your bills, but it will devastate your credit for the next ten years.
Although the entire process can be stressful, do not allow the stress to take over. Lots of debtors are stressed out when they’ve come to filing time. Don’t let the process control you in a negative way. You will get through it, and you should make an effort to remember that. You must realize that things will get better over time.
Chapter 7
When you are looking at a Chapter 7 personal bankruptcy, you may well have debts to worry about for which you share responsibility with another person, such as a spouse, family member, or business partner. When filing Chapter 7, you are not longer liable for the debts that you and a co-debtor signed for. Sadly, this will not be the case for your co debtor. Your creditors may simply turn their attention to your hapless acquaintance.
File when the time is perfectly right. They say timing is everything, and this rings true when filing for bankruptcy. For some people, filing right away is best, however for others, waiting a while is best. Speak with an attorney who specializes in bankruptcy to figure when is the best time to file, according to your situation.
Do not think of filing for personal bankruptcy as a shameful thing. Feelings of low self-worth, shame and guilt are common for those who have come to the point where bankruptcy is their only option. Learn to accept these feeling at face value– you can’t prevent yourself from feeling them, but you can stop them from controlling you. Maintaining a positive outlook during a troublesome financial upheaval is the best way to cope with bankruptcy.
It does not take much experience with bankruptcy to understand that the entire process can be extremely stressful. To have a reliable and trustworthy guide through the process, find a highly qualified attorney. Be sure that you consider more than the expense when you choose a lawyer. When it comes to choosing the right attorney, consider quality before cost. Get referred from others who’ve been in the same situation, check the BBB, and interview several people through free consultations. You can attend court hearings if you want to see a prospective attorney in action.
Know the bankruptcy code backwards and forwards before filing. For instance, you are not allowed to move assets from your name to someone else’s for a year before you file. Also, it is against the law for a person to acquire more debt on their credit card prior to filing.
This article has hopefully made it clear that declaring bankruptcy is a big decision that should be considered at length. With your finances in turmoil, seek a reputable attorney who has bankruptcy experience. This will allow you to see this as a true, fresh experience.
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