Tips On When And How To File For Personal Bankruptcy
Posted at by PConran on category BankruptcyFiling for bankruptcy is always a bad thing. Bankruptcy is a touchy subject, and people often don’t want to mention it when someone asks about their finances. Read this article to learn more about bankruptcy and make the best decision.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. You have other options available like consumer credit counselling services. Bankruptcy has a negative effect on your credit reports, in that it is permanently there. Before you take this step, make sure all your options have been considered.
When bankruptcy seem inevitable it is important not to use your retirement funds or emergency savings to pay creditors. 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.
A key tip for those filing a personal bankruptcy petition is to always be completely honest in all documentation. Don’t hide income or assets from your lawyer or the bankruptcy trustee or you may find yourself in legal trouble.
Don’t avoid telling your lawyer specific details with your case. Don’t assume that they will recall every detail that you go over with them without a friendly reminder. Ultimately, this is your bankruptcy and your financial future, so never hesitate to advocate on your behalf.
Rather than checking online, try to get recommendations from friends or family about a suitable bankruptcy attorney. There are lawyers out there who will take advantage of your financial state and not deal honestly with you. Make sure your filing process goes as well as possible by finding a trustworthy lawyer.
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. Be certain you talk to the lawyer, himself, instead of a paralegal or assistant; those people aren’t allowed to give legal advice. Look for an attorney until you find one you feel comfortable with.
Be sure you know what the difference between Chapter 13 and Chapter 7 bankruptcy is. Go to a reputable website and research the benefits and detriments of each type of bankruptcy. Do not hesitate to have your lawyer explain any details that seem difficult to grasp. This will help ensure you make the right choice when filing.
You could see about filing for Chapter 13 personal bankruptcy. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. Remember that missing a payment to the plan will result in your case being dismissed.
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. But, your car has to have been bought at least 910 days before you file. Also, it must come from a high interest loan and you have to have been consistently working.
It is possible to get an auto loan or mortgage during the repayment period for Chapter 13 bankruptcy. But, it could be harder. You will need to secure the trustee’s approval for any new debt obligation. Create a budget and prove you can afford a new loan payment. You should also be prepared to explain why you need to purchase the item.
As you can now see, you do not have to let bankruptcy consume your soul. The tips here can help provide you with some guidance to avoid filing bankruptcy. By using the advice you have learned here, you will find big changes in your life, and you can avoid damage to your credit score.