Bankruptcy Made Simple With These Easy Tips
Posted at by PConran on category BankruptcyIt can be a complicated process to file for personal bankruptcy. For example, there are several types of bankruptcies. Each type depends on several factors including your income as well as your debts. Prior to filing, there is a lot you need to know. The following tips will help put you on the right path.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. If you have unmanageable debt, you need to familiarize yourself with regional bankruptcy laws. Each state has its own set of rules regarding bankruptcy. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. Make sure you know the laws where you live before you file.
You might find it difficult to obtain an unsecured credit card or line after emerging from bankruptcy. A great way to rebuild your credit is to apply for a prepaid credit card. You can exhibit your desire to rebuild your credit this way. It will take time, but when creditors see a pattern that satisfies their need to see your good faith with payments, you will then be able to apply for unsecured cards.
Before declaring bankruptcy, ensure that all other options have been considered. For example, if your debt is small, try a type of consumer counseling program. It is sometimes possible to negotiate smaller payment by yourself. If you do this, make sure you save a written record of debt modifications that are negotiated.
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. In Chapter 7 most of your outstanding accounts will essentially be erased. This includes creditors and your relationship with them will become no longer existent. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. When choosing the type of personal bankruptcy that is correct for you, it is very important that you know the differences.
It is important to know how Chapter 7 filings differ from Chapter 13 filings. Investigate the benefits and pitfalls of both. Online resources may be able to provide all the information you need. Before making any decisions, discuss the information you have learned with your lawyer.
Consider all options before filing for bankruptcy. Before filing, talk with an attorney who can help you weigh all of your options. Look into loan modification plans if you need to deal with an imminent foreclosure. This type of plan allows your lender to work with you eliminating charges, extending your loan, and lowering interest rates to help you pay back the loan without drowning in debt. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
Once your bankruptcy filing is under way, take the time to decompress a little. Lots of debtors are stressed out when they’ve come to filing time. That stress can lead to depression, if you don’t take the right steps in fighting it. Once your petition is in the hands of the judge, all you can do is wait.
As you now know, bankruptcy is not a decision that should be made lightly. After weighing all of your options, if you conclude that bankruptcy is the best option for your particular situation, be sure to hire a competent attorney. Follow the advice given in this article to get through this rough time and move on to a more secure financial future.