Before you file for bankruptcy, make sure you have considered all your options. Many people feel embarrassed or ashamed if they have to tell other people that they are bankrupt. Use the tips in this article to help you avoid bankruptcy so you can save yourself from all that trouble.
Most people end up filing for personal bankruptcy because they owe more than they make. If this is the case for you, you should begin to investigate the legislation in your state. Different states have different laws regarding bankruptcy. You may find your home is safeguarded in one state, while in another it isn’t. It is best to become familiar with your state’s laws regarding bankruptcy before you take the steps to file.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Do not hesitate to remind your lawyer of any details regarding your case. Don’t just assume that the attorney will remember it automatically. Be as open as you can be to make sure your bankruptcy goes as well as possible.
Chapter 7
You may have heard bankruptcy referred to differently, either as Chapter 7 or Chapter 13. Learn the differences between the two before filing. Chapter 7 eliminates all debts. The ties with the creditor will be broken. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
Your most important concern is to protect your home. It isn’t inevitable that you will lose your house when you file for bankruptcy. You can still keep your home, it just depends on your specific situation and the value of your home. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
Be around family as much as possible. Bankruptcy proceedings can be extremely harsh. Having to declare bankruptcy leaves many people feeling like a failure. A lot of people become depressed and withdrawn until their bankruptcy is discharged. This is not a good idea because staying alone could cause serious problems with depression. Because of this, you need to make sure you spend as much time as you can with your family and friends, even if you are ashamed of your finances.
Once your bankruptcy filing is under way, take the time to decompress a little. Bankruptcy is a stressful process: you will have to go over your bad financial decisions and perhaps feel ashamed about your decision. This stress could morph into clinical depression, if you fail to adequately address the problem. While the process is tough, you are getting a chance to start over.
Don’t take big cash advances off your credit cards in the days prior to filing for bankruptcy. This could be considered as fraud, and you may even be forced in paying all of it back to credit card companies.
Think before you pay debts after you’ve decided to file. Bankruptcy laws generally prohibit certain creditors from being paid back 90 days before filing and family can be around a year! Find out more about legal requirements before making your decision.
If you believe that bankruptcy proceedings may be the answer to your financial woes, you should make haste to learn about the process. Yes, it may be hard to admit the need for help, however, if you try to stall from getting help your situation can only worsen. Speaking with a professional in a timely manner will allow you to receive sound advice that can help you before things get out of hand.
If you’re continuously making delinquent payments and are constantly missing payments, filing for bankruptcy might just be a kinder, gentler solution for you. Though it will still mar your credit history for up to 10 years, the damage can be improved. Among the advantages of bankruptcy is that of a clean slate.
Clearly, filing for personal bankruptcy is not your only option. Using the tips you just read, you can create a financial plan that will help you avert this terrible financial fate. Start using the information you learned from this article and make changes so you may not have to ruin your credit history.
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