Dealing with bankruptcy is a very hard situation. The number of options available to those with financial problems can be small. Even if your credit score isn’t good, you may still find that there are ways to get a home loan or a car.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If you’re in this situation, learn about the laws where you live. Bankruptcy laws vary from state to state. For example, whether or not you can keep your home, as well as what you need to do to keep it, is different for every state. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
You should check with the personal bankruptcy resources available online to educate yourself thoroughly before you begin the process. The U.S. Department of Justice and American Bankruptcy Institute are two such places to look. The more you know, the better equipped you’ll be to make the wise decisions needed for a successful bankruptcy.
Consider all options before deciding to file for personal bankruptcy. You can also avail yourself of other options, such as consumer credit counseling. Be certain that bankruptcy is the only option you have before pursuing this course because bankruptcy is always evident on your financial and credit history.
When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. There are lawyers out there who will take advantage of your financial state and not deal honestly with you. Make sure your filing process goes as well as possible by finding a trustworthy lawyer.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. There are some assets that cannot be seized through bankruptcy, and the law lists those assets. Be well prepared for bankruptcy by reviewing this list. It will tell you whether are not the things you value most are subject to seizure. If you are not aware of the rules, you could be setting yourself up for a lot of stress when your most important possessions are taken in the bankruptcy.
Before you file, make sure you understand current bankruptcy laws. 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 know what these changes are, go to your state’s website or contact the legislative offices.
Make sure that you really need to file for bankruptcy. Consider whether debt consolidation may be a more viable alternative. Filing a claim can take a long time and cause much stress. Credit will be much harder for you to come by after you file for bankruptcy. So, consider bankruptcy only as a last resort when you have no other choice.
Consider filing using chapter 13 bankruptcy. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Keep in mind that even missing one payment can be enough for your whole case to get dismissed.
Debt Repayment Plan
Look into all of your options before you choose to file for bankruptcy. Consult with a bankruptcy attorney to see if an interest rate reduction or debt repayment plan is an alternative to filing for bankruptcy. If a foreclosure is your reason for filing look into your options with your bank first, such as 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. At the end of the day, creditors want to get paid, and sometimes a debt repayment plan is preferable to dealing with a bankrupt debtor.
Know the rights that you have as you file for bankruptcy. Some bill collectors will tell you that your debts can’t be bankrupted. There are a few debts that cannot be cleared, such as student loans and child support, but be sure to know the details when dealing with debt collectors. 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.
Be decisive at the correct moment in time. Timing is important, and that is especially true when filing for bankruptcy. In some cases, it is better to file immediately, while other situations benefit from trying to get certain finances in better shape before filing. Consult with an attorney who specializes in bankruptcy so you know when it is a good time to file.
Never take huge cash advances directly from your credit cards before you file for bankruptcy, since you know that all debts will be erased from these cards. Not only is this fraud, but you could end up having to pay back the money, even once you have filed for bankruptcy.
Even if you have filed for bankruptcy you now realize that this does not limit you in life forever. By demonstrating responsible financial management, (saving money, making payments on time) you can impress creditors and rebuild your credit rating. So begin saving your money and you will realize how much difference it makes when shopping for a home loan or car.
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