Most people never expect to be in the position of facing bankruptcy. However, some situations in life are simply beyond our control. Once debt reaches a certain level, bankruptcy may be the only option. If you are approaching a bankruptcy situation, reviewing the advice presented below may help you understand what happens next.
Make sure that you understand everything you can about personal bankruptcy by visiting websites that offer information. The U.S. Department of Justice and National Association for Consumer Bankruptcy Attorneys provide excellent information. Knowing as much as possible about bankruptcy gives you an advantage and will help you make the best decision possible.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. Resisting the temptation to hide income or valuable assets from the bankruptcy trustee is a smart way to avoid potential complications, penalties, and the possibility of being barred from re-filing in the future.
Unsecured Credit
It’s not uncommon to learn soon after bankruptcy that you are unable to get an unsecured credit card easily. If so, apply for a secured credit card. This will show other people that you’re serious when it comes to having your credit record in order. After some time passes they may be willing to offer you unsecured credit.
Do not attempt to conceal any assets when filing for bankruptcy because you may be penalized when they are discovered. It is necessary to be open regarding both the positive and negative aspects of your financial life. Bankruptcy can be a chance to simplify your finances, but any schemes you employ to conceal the truth can ruin that chance for you.
Seek a less serious option prior to filing for bankruptcy. You could find relief from small debts by using a consumer credit counselor. Also, if you just contact your creditors and speak to them plainly and truthfully, the odds are good that you can negotiate a better payment structure that you can afford.
It is important to know how Chapter 7 filings differ from Chapter 13 filings. Take time to research this online and see the pros and cons for filing each one. Before making any decisions, discuss the information you have learned with your lawyer.
Unsecured Debt
Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
Before declaring bankruptcy, it is important to know your rights. Do not rely on your debtors information about whether or not certain loans can be included in your bankruptcy. Only a few debts are immune to bankruptcy. Taxes, student loans and child support would be the major ones. If a collector uses this tactic about debt that can, in fact, be discharged through bankruptcy, report the collection agency to the attorney general’s office in your state.
Facing bankruptcy is a negative situation that can bring on stress. Look for a good attorney who can help you through the process. Try not to pick a lawyer based on cost alone. Think about quality rather than cost when hiring an attorney. Speak with trusted people, check the BBB and take advantage of the free bankruptcy attorney consultations. When looking at bankruptcy attorneys, consider sitting in on one of their court hearings to find out how they handle the case.
Never take big cash advances from the credit cards that you own prior to filing for bankruptcy, even though you know that the debt will be erased. This is fraud, and you will be required to pay that money back.
It is not uncommon for people to declare that they will never again use credit cards after they declare bankruptcy. Since using credit responsibly is the only way to improve your credit score, this is not such a good idea. Avoiding credit altogether prevents you from rebuilding your credit standing, and will therefore serve as an obstacle when you wish to finance a house or a vehicle. Start with having a single credit card to help you go in the proper direction.
Once you determine that claiming personal bankruptcy is something that you must do, you will need all the advice that you can get. Not entering the situation blindly will help simplify the process. The information in this article is designed to put your mind at ease, which means you can deal with your bankruptcy in the most efficient way possible.
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