When Is The Right Time To File Personal Bankrupcy?
Posted at by PConran on category BankruptcyA lot of people in this day and age are deeply into debt. Threats come from collection agencies and other creditors while the bills just keep piling up. If this sounds like you and your situation, filing for bankruptcy may be a good idea for you. Read this article to determine if this is the right approach for you.
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. Many sites, including the U.S. Department of Justice and American Bankruptcy Institute are two such places to look. By being well armed with the correct knowledge, you can be certain of the decision that you have made. Additionally, you will understand the processes necessary to conduct your personal bankruptcy matters in a smooth manner.
If filing bankruptcy is in your future, don’t waste any savings you may have attempting to pay off your debts. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.
Before you file for bankruptcy, find out which of your assets will be exempt from seizure. Certain assets, as listed in the local bankruptcy regulations, are immune from seizure during bankruptcy. It is important to be aware of this list so you will know what assets are saved. If you don’t read it, you could have nasty surprises pop up later due to your prized possessions being seized.
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. Chapter 7 involves the elimination of all of your debt. Your former ties with creditors will cease to exist. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. To make the wisest choice, you will need to understand the consequences of each of these two options.
It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. Always ensure that the person you meet with is a real lawyer, not a legal assistant or paralegal. These people can’t give legal advice. Taking the time to compare lawyers will ensure that you get a person that you can be yourself around.
Before you file for personal bankruptcy, weigh all of your options. You can get your interest rates reduced or enter into a debt repayment plan. Before you file bankruptcy, ask your attorney if any of these are viable alternatives for you. Look into loan modification plans if you need to deal with an imminent foreclosure. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. Creditors want to recoup the most money possible from debtors, and they can often get more through debt repayment plans than bankruptcy procedures.
Although the entire process can be stressful, do not allow the stress to take over. Bankruptcy is a stressful process: you will have to go over your bad financial decisions and perhaps feel ashamed about your decision. This stress could actually cause depression, if you don’t combat it. Your life will most likely improve once you’re over this hump, so relax.
You should now understand that there is more than one path to take when it comes to bankruptcy. If you go into the process armed with knowledge and confidence, you can wipe away your debt and give yourself a fresh start.