Understanding Why Bankruptcy Is Not The End Of The World
Posted at by PConran on category BankruptcyIt’s difficult for anyone to file bankruptcy, but sometimes it can be the only option. It is best to go into this kind of thing when you know what going on and how to go about doing it. This article contains information that has been gathered from others who have successfully navigated the bankruptcy process.
The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. If you’re in this situation, learn about the laws where you live. You will find that each state has their own bankruptcy laws. For example, the personal home is exempt from being touched in some states, but not in others. You should be familiar with the laws for your state before filing for bankruptcy.
When it appears likely that you will file a petition, do not start spending your last remaining funds on debt repayment. You should never touch your retirement accounts, unless you have absolutely no choice. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. Many belongings may become eligible for repossession or seizure after filing for bankruptcy. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
If you are meeting with a lawyer to discuss bankruptcy, the initial consultation should be free so ask every question you have. Most lawyers provide a consultation for free, so consult with many of them before picking which one you want to hire. Make a decision when all your concerns and questions have been addressed well by one lawyer in particular. You need not decide right away. After your consultations, do some additional research on each attorney you consider qualified for the job.
A lot of bankruptcy attorneys will let you have a consultation, so try several out. It is important to meet with the actual attorney, not the attorney’s assistant or paralegal; those people are not permitted to give legal advice Hiring a lawyer could help you become comfortable with the legal things that you will encounter.
Safeguard your home. You do not have to lose your home in the process of a bankruptcy. There are mitigating factors, such as lose of value, or multiple mortgages. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
It is important to understand clearly the benefits of a Chapter 7 or 13 bankruptcy. Investigate the benefits and pitfalls of both. Online resources may be able to provide all the information you need. If you do not understand what you are reading, talk to your attorney before making that serious decision.
If you are going to be filing for bankruptcy, think about filing Chapter 13. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Just know that missing one payment could cause your case to be dismissed.
Look at all of your options prior to deciding to file for bankruptcy. Ask a bankruptcy lawyer if a debt repayment plan or rate reduction would be of benefit. If you are about to lose your house, talk to your lender about a loan modification. Your lender can adjust your loan in many ways including extending the time you have to pay, reducing your interest rate, or canceling some of your late fees. Most creditors will be willing to work out an option to avoid not getting paid at all.
Sometimes declaring personal bankruptcy is simply unavoidable. You should now have some excellent advice from people who have personally struggled with the bankruptcy process. Spending some time learning for others who have gone through the same thing reduce some of your stress.