Personal Bankruptcy Tips That Can Help Your Credit

Bankruptcy can be something that is difficult to live with. As you look at the hole you’ve dug yourself, you might think there is no escape. But, even those with damaged credit histories have options when it comes to securing homes and vehicles, as the following article explains.

Be sure you’re doing what’s right before you file for bankruptcy. You can find services like counseling for credit that consumers can use. Your credit score will be forever effected by bankruptcy, which is why you should do everything else in your power to resolve matters first.

Do not be afraid to remind your attorney of important specifics of your case. Never assume that they can remember all details without reminders. It’s your financial future that is in his hands; don’t hesitate to speak up.

Chapter 7

Learn the differences between Chapter 7 and Chapter 13 bankruptcies. Chapter 7 bankruptcy completely wipes out your debt. All happenings with creditors will disappear. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. To make the wisest choice, you will need to understand the consequences of each of these two options.

Since the majority of attorneys are willing to provide no-cost initial consultations, it is smart to meet with more than one before you make a selection. Always ensure that the person you meet with is a real lawyer, not a legal assistant or paralegal. These people can’t give legal advice. Interviewing multiple attorneys is a good way to find the best fit.

Protect your home. Filing for bankruptcy does not always mean you will end up losing your home. You can still keep your home, it just depends on your specific situation and the value of your home. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.

Chapter 13

Consider Chapter 13 bankruptcy, if you chose to file. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. This allows you to keep possession of your real estate and property and repay your debt through a debt plan. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Remember that missing a payment to the plan will result in your case being dismissed.

Think about all the choices available to you when you file for bankruptcy. There are many recouses available to help you lower your payments and get back on track. If you are looking at foreclosure, think about a loan modification program. 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. When all is said and done the creditors just want their money, and more often than not will work with you on a repayment plan.

Although the entire process can be stressful, do not allow the stress to take over. It can be several months between the initial filing and the final discharge of debts. This stress could actually cause depression, if you don’t combat it. While the process is tough, you are getting a chance to start over.

Be certain you are totally aware of the laws of bankruptcy before you file. For example, it is against the law to transfer any assets from the filer to another for a year before filing. Also, it is against the law for a person to acquire more debt on their credit card prior to filing.

When you are filing for bankruptcy, make sure you list all of the financial information you may have. Leaving out information either purposely or by mistake can prolong your petition, or have it dismissed completely. Even if it’s a small sum, make sure it is listed. When it comes to the types of things you might not be thinking about adding, just think about any automobiles you have, any money under the table you’re making, etc.

If you are planning to file for bankruptcy in the immediate future, you should refrain from taking out cash advances via your credit cards. This fraudulent practice is a demonstration of bad faith. Debts you incur this way will likely not be discharged in a bankruptcy, and you will still have to repay them.

Although you have already filed for personal bankruptcy, don’t make the mistake of thinking that you’re now marked for life. When creditors can look at your credit report and see that you have made an effort, over time, to pay on time, getting credit will become easier again. You will receive more favorable treatment when you apply for a loan if you start saving now.