Having Financial Issues? Have You Considered Bankruptcy?
Posted at by PConran on category BankruptcyWhen a person needs to file for personal bankruptcy, it is not ever a happy moment. Bankruptcy is often a dire sign in a person’s financial life, and can cause significant embarrassment and shame. But don’t surrender; this article can be a guide to avoid bankruptcy, or to handle it more easily if you do need it.
Before you file for bankruptcy, carefully consider if it is the right option for you. Debt advisors are one of the many other avenues you can consider. Bankruptcy can leave your credit history permanently marked. Prior to doing this you need to be sure you try everything else first to get your credit history into shape and to lessen the impact.
Do not use your retirement fund or savings to pay off creditors. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. 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.
You are going to get found out and get in trouble if you don’t disclose all your assets, so be totally honest from the beginning. It is important that you are completely transparent, showing everything financial that needs to be known. Don’t withhold information, and create a smart way of coping with the reality of the situation.
You should never pay for your first consultation with a bankruptcy attorney. Make the most of this free consultation by asking lots of questions. Most attorneys offer free consultations, so meet with a number of them before you retain one. Make your decision after all of your questions have been answered. It is not necessary to make a final decision right away. If you’re unsure, don’t hesitate to talk to multiple bankruptcy lawyers.
Stay abreast of new laws that may affect your bankruptcy if you decide to file. The laws change a lot, so you need to look them up and have a better idea of how to properly approach the bankruptcy process. To learn about any changes, search the Internet or contact your state’s legislative office.
Do some research to find out more about Chapter 13 and Chapter 7. Chapter 7 bankruptcy completely wipes out your debt. This includes creditors and your relationship with them will become no longer existent. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. Look into both types of bankruptcy before deciding which one would suit your particular needs.
It is possible to keep your home. Filing for bankruptcy will not always result in losing your home. It depends what your home value is and if there is a second mortgage, as all this stuff comes into play when determining if you can keep the home. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
If you are making more money than you owe, bankruptcy should not even be an option. While bankruptcy may seem like an easy way out of having to pay back all of the debt that you owe, it is a stain that will remain on your credit report for seven to ten years.
During a Chapter 13 bankruptcy, you may still be able to get a mortgage or car loan. However, the process of approval is a bit more stringent. You will have to get this loan approved by your trustee. You will need to make a budget and prove that you will be able to afford your new loan payments. You will need to be able to explain why the purchase is necessary.
Know the rights that you have as you file for bankruptcy. Many creditors or bill collectors might tell you your debts cannot be included in a bankruptcy. Only a few debts are immune to bankruptcy. Taxes, student loans and child support would be the major ones. If a debt collector tells you this false information, seek the advice of your bankruptcy attorney. You may also want to report the bill collector to the attorney general’s office.
In most cases, bankruptcy isn’t really your only option. The tips written in this guide can lead you to the right path in avoiding bankruptcy. Begin today with what you learned here and soon you will see positive changes in your financial situation, so you can avoid the harmful process of filing for bankruptcy.