Although unhappy circumstances in your life might have led you to file for bankruptcy, your life post-bankruptcy can be much better. The bankruptcy option was created to give you another chance to live a financially responsible life. Don’t look at it as the end of the world; read this article to help you determine how your life will be enhanced by bankruptcy.
Do not use your retirement fund or savings to pay off creditors. Do not tap retirement accounts unless there is no other alternative. Though you may need to use a bit of your savings, try hard to maintain some of your reserves so that you have some degree of flexibility going forward.
Research what assets are exempt from seizure before you decide to declare bankruptcy. The Bankruptcy Code includes a list of the types of assets that are exempt from the bankruptcy process. Be sure that you study this list. Make yourself aware of any assets you have that could be 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.
Do not abandon hope. When you file for bankruptcy you may be allowed to recover property like your car, electronics or jewelry that might have been repossessed. If it has been 90 days or less between the repossession of your property and your filing, you might be able to get your property back. A lawyer will be able to assist you with filing the paperwork to get the items back.
Hire a lawyer if you plan on filing for bankruptcy. Filing for bankruptcy is complicated and there is no way you can understand all you need to know. A specialized bankruptcy lawyer can ensure that you are handling your bankruptcy filing the right way.
Chapter 13
Make sure that you understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. If Chapter 7 is what you file, your debts will get eliminated entirely. All creditor relationships will be severed. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. Look into both types of bankruptcy before deciding which one would suit your particular needs.
Avoid filing for bankruptcy if you make more money than your monthly bills. You should know that filing for bankruptcy will ruin your credit score for at least ten years and that improving your credit score will be expensive.
Before declaring bankruptcy, see if there’s anything less drastic you can do to repair your credit. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. If foreclosure looms, think about getting your loan plan modified. Some lenders will make concessions rather than losing the money owed to bankruptcy. These concessions include waiving late fees, lowering interest rates, and changing the loan term. Remember that creditors desire to get paid and usually debt repayments are often preferable when dealing with bankrupt debtors.
Understand the rights you have as a bankruptcy filer. You might hear from your creditors that your debts cannot be canceled through bankruptcy. Only a small number of debts are not dischargeable, including student loans and child support obligations. If you are told differently by a collector, research the information yourself. If you find they are in error, get the name of their company, phone number and any identifying info so you can report it to the attorney general in your area.
As previously stated, the reasons for filing for bankruptcy are not generally a happy fairy tale. On the other hand, the new beginning that bankruptcy offers can lead to a new life story. As a matter of fact, if you put the ideas in this article into play, you can let bankruptcy proceedings a pivotal moment in your existence towards a brighter future.
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