Nowadays, the economy is not in very good shape. The cycle of a tough economy leads to people losing jobs and going into debt. Deep debts usually wind up in bankruptcy. This is not a pleasant situation. When you or a loved one is contemplating bankruptcy, it is important to read the following piece in order to understand available alternatives.
Never lie about anything in your bankruptcy petition. Do not try to shield some assets or income from your creditors. This can get you in serious trouble and prevent your bankruptcy petition altogether.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. There are a number of companies who may take advantage of your situation, so always work with someone that is trustworthy.
Stay positive. If you file for bankruptcy at the right time it could enable you to get your property back that you lost to repossession. There is a chance that you can get back your property if it has been less than ninety days since repossession. Consult with a lawyer that can walk you through the filing process.
Weigh all of your options before declaring bankruptcy. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. You may have luck negotiating lower payments by dealing directly with creditors, but be sure to document any get and new agreement terms in writing from each creditor.
Chapter 7
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. In Chapter 7 most of your outstanding accounts will essentially be erased. All of your financial ties to the people you owe money to will disappear. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. 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.
Be sure that bankruptcy really is your best option. You may find consolidating your debt may be simpler. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. Because of this, you need to think of bankruptcy as a nuclear option; that is, a last resort.
Filing for bankruptcy is not the best choice if your monthly income is enough to cover your bills. Although bankruptcy may feel like a simple method of getting out of your large debt, it leaves a permanent mark on your credit history for up to 10 years.
Interest Rates
Look at all the alternatives to bankruptcy before filing. Talk to a bankruptcy lawyer to see if a debt repayment plan or reduction in interest rates is a viable option for you instead of bankruptcy. For example, if you are in talks of foreclosure, you could use a modified loan to overcome your debt. Your lender can help you get current on your loan by offering you one of a number of modifications, such as getting rid of late charges, lowering interest rates, or extending the length of the loan. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
Remember to have fun with your life when you’re done with the filing process initially. The filing process is extremely stressful for a lot of the people who go through it. That stress can lead to depression, if you don’t take the right steps in fighting it. Bankruptcy is hard to go through, but you must remember that a less stressful, more enjoyable life is waiting on the other side of it.
Even if you are involved with Chapter 13 bankruptcy, it is still possible to get a mortgage or an automobile loan. It is just tougher. You need to contact your trustee so you can get approved for a new loan. Draw a budget up and show how you can pay the newer loan payment. You will always have to let them know why this item needs to be purchased.
Make certain that you are fully aware of each and every bankruptcy law prior to even considering filing. There are many pitfalls you can easily fall into, such as transferring away assets to prevent them from being included in the filing. Maxing out your credit cards immediately before filing is also illegal.
Financial Information
Make sure that you disclose every bit of financial information on your bankruptcy petition. Forgetting anything can cause a delay, or even a dismissal. Even if you believe that certain financial information is inconsequential, do not avoid including it in your documentation. Current loans, second jobs and assets ought to be included.
Although the economy is slowly picking up, there are still many people left without jobs and a decent wage. Even without steady income, there are things you can do to avoid bankruptcy. This article should have given you some solid advice for staying afloat in tough times. Godspeed.
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