In order to file a bankruptcy claim, you will run into more than a couple of complicated hurdles to jump. There are different chapters of bankruptcy, and you may qualify for one or more. The most important step you can take, of course, is to learn what you can about the process before ultimately deciding one way or the other. In the following paragraphs, you’ll find some tips that will get you off to a good start.
When you feel certain that you must file for personal bankruptcy, refrain from squandering your life savings to pay off unsecured debt. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.
Instead of getting your lawyer from the yellow pages or on the Internet, try your hardest to find one with a personal recommendation. There are so many dime-a-dozen companies out there who make it a practice of preying on financial desperation. You need to make sure your bankruptcy goes smoothly, so find someone you know you can trust.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. To find an itemized list detailing assets exempt from bankruptcy, find the Bankruptcy Code. Many belongings may become eligible for repossession or seizure after filing for bankruptcy. This will ensure that you do not have any surprises once you have filed bankruptcy.
Safeguard your most valuable asset–your home. Bankruptcy filings don’t necessarily have to end in the loss of your home. It is entirely possible that you will be able to keep your home. This is dependent upon the your home’s value and whether or not you have taken a second mortgage. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
There are differences between Chapter 13 bankruptcy and Chapter 7; be sure to familiarize yourself with both. Get a good grasp of the pluses and minuses each type of filing involves by researching both of them extensively. Learning about bankruptcy is not simple, so call a bankruptcy attorney to make an appointment to ask questions.
Chapter 13 Bankruptcy
Look into filing Chapter 13 bankruptcy. If you have a regular source of income and less than $250,000 in unsecured debt, you can file for Chapter 13 bankruptcy. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Keep in mind that missed payments will trigger dismissal of your case.
Don’t file for bankruptcy the income that you get is bigger than your bills. Understand that while declaring bankruptcy will eliminate many of your debts, you will have difficulty obtaining credit and will pay more in interest for the credit you do receive for at least seven years.
Find out about lowering the cost of the payment you pay monthly on your car, if you are afraid of losing it. Chapter 7 usually can help payments be lowered. You need to have bought your car 910 days before you file, have a loan with high interest and you’re also going to need a good work history.
If you have a co-debtor, consider the ramifications that filing a Chapter 7 bankruptcy will have. When filing Chapter 7, you are not longer liable for the debts that you and a co-debtor signed for. So, in short, if you file bankruptcy, but they do not, they will be held completely responsible for your joint actions.
Be sure you know the bankruptcy laws before you think about filing. Here is one example, an individual who files for bankruptcy cannot transfer any assets for a year before the filing date. In addition, it’s unlawful for a filer to acquire more debt on their credit cards before they file.
Research the rules and regulations of personal bankruptcy before you file. If you do not file for bankruptcy properly, you might run into a lot of different issues. Some mistakes could lead to having your case dismissed. This is exactly why it’s imperative that you take the time necessary in order to research what you can about bankruptcy. Doing so will make the process a lot easier.
Take a look at all of your financial options before filing for personal bankruptcy. Credit counseling is one option you should consider. There are many non-profit debt counseling services available. They can work with both you and your creditors to find a feasible way in which your debts can be paid off. You pay them and then they pay the creditors.
Now you know why bankruptcy filing is a type of decision that needs to be carefully thought out before being pursued. With your finances in turmoil, seek a reputable attorney who has bankruptcy experience. This will allow you to see this as a true, fresh experience.
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