Filing for personal bankruptcy is quite a complicated process. There are different kinds of bankruptcy you can file, and the kind you select depends on your individual financial picture and what types of debt you have. Know as much as you can before you file. This information may point you in the right direction.
Before undertaking the bankruptcy process, ensure you have made the correct decision. You have better options. For example, you could try credit counseling. Since your credit history will forever note the bankruptcy, you want to make sure that you have tried everything else before you take an action such as this, in order to minimize the effect it will have with regard to your credit history.
Do not use your retirement fund or savings to pay off creditors. Leave your retirement accounts untouched unless there is absolutely no other alternative. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.
Ensure that you are providing genuine details when filing a bankruptcy petition, because honesty is the best policy when dealing with bankruptcy. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Unsecured Credit
After a bankruptcy, you may still see problems getting any kind of unsecured credit. This being the case, look at secured card options. You can exhibit your desire to rebuild your credit this way. Once you’ve built up a history of on-time payments, you may start getting unsecured credit again.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. Bankruptcy exemptions are properties may not be seized during bankruptcy. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Since most attorneys offer free consultations, meet with a few attorneys before deciding who to hire. Don’t choose a lawyer until your questions about bankruptcy are sufficiently answered. You don’t need to decide what to do right away. You could even go to different lawyers for advice.
Make sure your home is safe. Losing your home is thought of as common in bankruptcy cases, but it is by no means inevitable. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
Before filing for bankruptcy ensure that the need is there. You may well be able to regain control over your debts by consolidating them. It is not a quick and easy process to file for bankruptcy. It will also limit your ability to get credit for the next few years. Needless to say, if some alternative strategy will allow you to take care of your debts, you should give it a try before resorting to bankruptcy.
Chapter 13
Find out more about Chapter 13. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Remember that if you even miss one payment that’s due under this plan, the court could dismiss the whole case.
Don’t take big cash advances off your credit cards in the days prior to filing for bankruptcy. Not only is this fraud, but you could end up having to pay back the money, even once you have filed for bankruptcy.
Before filing for bankruptcy, it is important to still be smart with your finances. Avoid incurring new obligations or allowing existing debt to grow in advance of your bankruptcy. The courts and your creditors will be looking at your current, as well as past, credit history when adjudicating your bankruptcy. Even though you may have found yourself in a bind, you want to show them that you are trying to make serious efforts to stabilize your finances.
As you now know, bankruptcy is not a decision that should be made lightly. If it’s the best course of action for your current financial situation, then be sure to find an attorney with a lot of experience with personal bankruptcy so that you may be able to have a better financial future.
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