Personal Bankruptcy: Do I Have Any Choices?
Posted at by PConran on category BankruptcyThe decision to file for bankruptcy is very serious and should not be taken lightly. Keep reading the ideas in the piece that follows in order to understand what you can expect and what ought to go into making such a major decision. Find out all the information you can before filing for bankruptcy.
When bankruptcy seem inevitable it is important not to use your retirement funds or emergency savings to pay creditors. Avoid touching your retirement accounts whenever possible. Your savings accounts offer valuable financial security so try to leave them intact.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. Make sure to get the most up-to-date information concerning the bankruptcy laws in your state. Keep up with your current state’s laws and regulations to figure out what steps you should take.
Do what you can to keep your home. Just because you’re going bankrupt doesn’t mean that you also have to be homeless! For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. Check to see if you pass the requirements necessary to file for a homestead exemption.
Before you file for bankruptcy, make sure you absolutely need to. You may find consolidating your debt may be simpler. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. It will have a long-lasting effect of your future credit opportunities. So, consider bankruptcy only as a last resort when you have no other choice.
If you are going to be filing for bankruptcy, think about filing Chapter 13. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Just know that missing one payment could cause your case to be dismissed.
Before filing for bankruptcy under Chapter 7, make sure that you consider the implications this will have on any of your co-debtor, who are usually family members, close friends or business associates. A Chapter 7 bankruptcy will relieve you of your legal responsibility to pay any joint debts. This does not dissolve any co-signers of the debt, and your creditors will continue to try and collect from them.
If you filed for Chapter 13 bankruptcy, you can still get a mortgage or a car loan. However, the process of approval is a bit more stringent. You need to speak with your trustee so that you can be approved for a new loan. Create a budget and prove that you will be able to afford it. You will also need to explain why it is necessary for you to take out the loan.
When you do file for bankruptcy, make sure you know your rights. You might hear from your creditors that your debts cannot be canceled through bankruptcy. Only a few kinds of debt, like student loans or child support, are ineligible for bankruptcy. If a bill collector attempts to say their bill cannot be discharged, look it up. If they are wrong, report them.
Bankruptcy isn’t simple and immediate. There are many things that must be taken care of, and must be done right. By following the above advice, you will make fewer mistakes and find yourself better prepared.