The Complex World Of Personal Bankruptcy
Posted at by PConran on category BankruptcyThose who face personal bankruptcy sometimes feel negative emotions, like anger. People can feel stuck in their situation, worrying how to do basic things, such as keeping food on the table each day. As you can see, filing for bankruptcy does not mean life is over.
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. Chapter 7 eliminates all debts. This includes creditors and your relationship with them will become no longer existent. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.
You can take steps to hang onto your house. Bankruptcy filings don’t necessarily have to end in the loss of your home. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
Before proceeding with your bankruptcy, it’s a good idea to start spending ample time with the people you care about most. Going through bankruptcy is a lot of stress. It takes time and a lot of people feel stressed and ashamed throughout this procedure. Many people decide to hide away from the world until the process is over. Washing yourself in self-pity will only make the situation worse and can leave you feeling very depressed. Therefore, it is important that you continue to spend quality time with your loved ones despite, in spite of your current financial situation.
If you make more money than what you owe, filing for bankruptcy is not a good option. It can seem like bankruptcy can be an easy way to avoid paying back your debts, however it leaves a serious mark in your credit report that can last between seven and ten years.
Before you make the decision to file Chapter 7 personal bankruptcy, take time to think about anyone it could affect. Speak to an attorney or read the bankruptcy laws in your state to find out if certain loans can be excluded from your filing. Creditors, however, will hold the co-signer liable for the entire balance of the debt.
It is possible to obtain new vehicle and home loans while a Chapter 13 case remains active. There will, however, be obstacles. You need to contact your trustee so you can get approved for a new loan. You will need to come up with a budget and show that this new loan payment schedule is doable. An explanation of need will also be necessary.
Make sure the time is right when you file a bankruptcy claim. Timing is everything, especially in personal bankruptcy filings. Sometimes, it is good to file immediately, but sometimes it is smarter to wait until you have passed through the worst of things. Speak to a bankruptcy lawyer to determine what the ideal timing is for your personal situation.
Now that you’ve reached the end of this article, you should see that bankruptcy doesn’t mean leading an unhappy life. It can be disturbing at first, but it is possible to overcome bankruptcy. Making use of the tips you found here will allow you to heal your financial situation.