It isn’t always easy to file for personal bankruptcy. There are different types of bankruptcy, and the type that you choose depends upon your personal finances and the nature of your debts. You should learn all you can about bankruptcy before filing. Here are a few wise tips to help you in your decision.
Generally bankruptcy is filed when a person is facing insurmountable debt. Study the laws in you state to learn what you need to do and what your options are. Every state is different when it comes to dealing with bankruptcy. For instance, your home might be protected in some states while you might lose it in others. Become acquainted with local bankruptcy laws before filing.
Don’t avoid telling your lawyer specific details with your case. You should not take for granted that your lawyer will remember every important detail that you have have told him earlier without a reminder. All information submitted to the court with your signature needs to be double checked.
The best way to build your credit up after a bankruptcy is making all your payments on time. If that’s the case, it is beneficial to apply for one or even two secured cards. By doing this, you will be letting people know that you want to fix your credit score. After a certain time, you will then be able to acquire credit cards that are unsecured.
Look for a bankruptcy lawyer that comes from a personal recommendation instead of someone random on the Internet or in the yellow pages. There are way too many people ready to take advantage of financially-strapped individuals, so you must ascertain that your attorney can be trusted.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. Bankruptcy exemptions are properties may not be seized during bankruptcy. Make sure that you carefully look over this list prior to filing to discover if your valuable assets will 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.
Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. There are numerous programs out there that may assist you with your debt, like a credit counseling program, a nonprofit group, government assistance, etc. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
Chapter 13
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Every one of your debts will be gone if you decide to go with Chapter 7. Any ties that you have with creditors will be dissolved. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. Take the time to learn more about these different options so you can make the best decision possible.
Don’t file bankruptcy if you can afford to pay your debts. Understand that while declaring bankruptcy will eliminate many of your debts, you will have difficulty obtaining credit and will pay more in interest for the credit you do receive for at least seven years.
Think about all the choices available to you when you file for bankruptcy. Some alternatives to filing for personal bankruptcy include debt repayment plans, interest rate reduction plans, and debt consolidation. Talk with the personal bankruptcy lawyer to find out more. Look into loan modification plans if you need to deal with an imminent foreclosure. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. Remember that creditors desire to get paid and usually debt repayments are often preferable when dealing with bankrupt debtors.
Before you decide to file for Chapter 7 bankruptcy, consider how it could affect other people on your credit accounts, such as family members or business partners. When you file a Chapter 7, your debts will be dissolved. Creditors, however, will hold the co-signer liable for the entire balance of the debt.
As you now know, bankruptcy is not a decision that should be made lightly. If you choose bankruptcy as a financial answer for your situation, you can only benefit from having a lawyer dedicated to this industry to help you out.
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