Tips For Chapter 13 And Chapter 7 Bankruptcy And Property
Posted at by PConran on category BankruptcyWhen a person needs to file for personal bankruptcy, it is not ever a happy moment. Personal bankruptcy is a stressful and potentially embarrassing time for many people. Don’t give into it and be sure to use this advice to figure out what you need to know to avoid bankruptcy.
When it soaks in that filing for personal bankruptcy, don’t use all of your retirement funds, or all of your savings to resolve insolvency or pay creditors. Avoid touching your retirement accounts whenever possible. Though you may need to use a bit of your savings, try hard to maintain some of your reserves so that you have some degree of flexibility going forward.
Take the time to find a simpler solution to your financial issues, before filing for bankruptcy. For example, you may want to consider a credit counseling plan if you have small debts. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. In Chapter 7 most of your outstanding accounts will essentially be erased. All the things that tie you to creditors will go away. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. It’s important to know what differences come with every type of bankruptcy. This will let you find out what’s best for you.
Take advantage of free consultations with lawyers and the ability to sift through and find the right one. Be certain to speak with an attorney, not their paralegal or law clerk, since they cannot give legal advice. It will be important to work with a bankruptcy lawyer that you feel comfortable with; a little comparison shopping will help you find the right one.
Become knowledgeable in regards to details about chapter seven bankruptcy vs. chapter 13 bankruptcy. Weigh all the information you can find on- and off-line to make an educated decision. If you’re really not sure how this all works after your research, meet with your lawyer and ask them prior to making a decision.
Before filing for bankruptcy ensure that the need is there. It may be that all you really need to do is consolidate some of your debts. Filling for bankruptcy could be a long and stressful process. You should be aware that there are some negative ramifications to it, like extreme damage to your credit score. Because of this, you need to think of bankruptcy as a nuclear option; that is, a last resort.
Consider Chapter 13 bankruptcy. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
As this solid advice demonstrates, there are other options besides bankruptcy. Using the tips you just read, you can create a financial plan that will help you avert this terrible financial fate. Apply the guidance you just received and see what it can do to improve your financial circumstances and bolster your credit record.