Filing personal bankruptcy is a somewhat complex process. There are different chapters of bankruptcy, and you may qualify for one or more. Before you decide to file for personal bankruptcy, you need to educate yourself about it. The following tips can help you get started.
Lots of people have to claim bankruptcy when their bills are larger than their income. If you are in this position, you need to be familiar with the laws in your area. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. Your house is safe in certain states; however, in other states, it isn’t. Be sure to have some familiarity with the law in your jurisdiction.
After you have declared bankruptcy, you may have a hard time being approved for unsecured credit. If you are in this situation, applying for a secured card may be the answer. This will show people that you are serious about getting your credit record back in order. It will take time, but when creditors see a pattern that satisfies their need to see your good faith with payments, you will then be able to apply for unsecured cards.
Before filling for bankruptcy, determine which assets will be exempted from seizure. Check the bankruptcy laws in your state to find out if certain items are excluded from your bankruptcy filing. You need to compare this list to the assets you own so that you are not surprised when certain assets are seized. 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.
State Legislature
Before you file for personal bankruptcy, be sure that you are cognizant of all current laws. The laws are constantly undergoing changes, so you must stay on top of them if you are going to file for personal bankruptcy correctly. Review the state legislature web site or contact the state legislature office to keep abreast of changes in the law.
Before filing for bankruptcy ensure that the need is there. Consolidating current debt could make it easier to manage. Bankruptcy is not a simple, breezy course of action that should be taken lightly. It will have a major effect on your credit as time goes on. Therefore, you must make sure that there is no other option that you could take before you file for bankruptcy.
Don’t file bankruptcy if you can afford to pay your debts. Sure, bankruptcy can get rid of that debt, but it comes at the price of poor credit for 7-10 years.
Before you decide to file for Chapter 7 bankruptcy, consider how it could affect other people on your credit accounts, such as family members or business partners. When you file under Chapter 7, you will no longer be legally responsible for any debts that were signed by yourself and a co-debtor. This does not dissolve any co-signers of the debt, and your creditors will continue to try and collect from them.
Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. It is just tougher. Your trustee must approve any new loans such as this. You will need to come up with a budget and show that this new loan payment schedule is doable. You will always have to let them know why this item needs to be purchased.
As you can see, you should give bankruptcy a lot of thought before deciding whether or not you should file. 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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