It can be hard, but at times necessary, to file for bankruptcy. This situation is handled best when you know what to expect and have information about what to do. Keep reading for tips and advice from those with personal bankruptcy experience.
If filing bankruptcy is in your future, don’t waste any savings you may have attempting to pay off your debts. Leave your retirement accounts untouched unless there is absolutely no other alternative. If you have to use a portion of your savings, make sure that you save some to ensure that you are financially secure in the future.
One of the most important things to remember when filing for bankruptcy is to be honest and truthful every step of the way. Withholding or lying about certain information can seriously worsen your financial situation. It could lead to being unable to file for bankruptcy or even legal trouble.
If you can, get a word-of-mouth referral for a lawyer. You want your bankruptcy to go smoothly, and the Internet is rife with fly-by-night companies whose only goal is to prey upon the financially desperate.
It is important to list all your assets and liabilities during the bankruptcy proceeding. Failure to do so will only cause you problems in the end. Whoever provides your legal consultation must be privy to all of your financial information. Do not hold back anything, and form a sound plan to make peace with your reality.
Speak to a bankruptcy attorney about what new laws may be going into effect before your bankruptcy filing. Make sure to get the most up-to-date information concerning the bankruptcy laws in your state. A qualified bankruptcy attorney is the best source for the latest information regarding the laws in your state.
Protect your home. Just because you’re going bankrupt doesn’t mean that you also have to be homeless! Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.
Make sure that you really need to file for bankruptcy. It may be that all you really need to do is consolidate some of your debts. Bankruptcy is a stressful process. It will also limit your ability to get credit for the next few years. Thus, you must make certain that bankruptcy really is the only viable solution to your problems.
Consider Chapter 13 bankruptcy for your filing. If you have a regular source of income and less than $250,000 in unsecured debt, you can file for Chapter 13 bankruptcy. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Missing a payment under these plans can result in total dismissal by the courts.
Investigate other alternatives before resorting to bankruptcy. 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. Loan modification plans on home loans are a great example of this. The lender is able to help you in a number of ways, such as reducing interest rates, eliminating late charges, and even lengthening the loan, giving you more time to pay. At the end of the day, creditors want to get paid, and sometimes a debt repayment plan is preferable to dealing with a bankrupt debtor.
After you have finished with the initial process of filing, you can relax and take a breather. Many people who undergo this process become way too stressed out. Don’t let the process control you in a negative way. You will get through it, and you should make an effort to remember that. Once your petition is in the hands of the judge, all you can do is wait.
Think about any co-debtors you have prior to filing for Chapter 7 bankruptcy. You may have your responsibility for your portion of the loan discharged under Chapter 7. But, bear in mind, the debt now becomes the sole responsibility of your co-debtor.
Before filing for bankruptcy, learn your rights. Bill collectors can try to scare you into believing that your debt will not be cleared. Most states allow for the majority of debt to be included on a bankruptcy. If a collector tells you your debt won’t be discharged in your bankruptcy and you know that it will, report the collector to the attorney general’s office in your state.
Consider any other options available before filing for personal bankruptcy. Think about seeing a credit counselor. There are many non-profit debt counseling services available. They can work with both you and your creditors to find a feasible way in which your debts can be paid off. You make payments to them and they pay your creditors.
Before you file, you have to quickly think to be more responsible fiscally. Don’t start racking up debt and don’t start up more dept before bankruptcy. In the course of a personal bankruptcy filing, your creditors and the court will examine your credit history right up to the filing date. Show that you are making a positive change to your current financial situation.
Once your bankruptcy is over, request a copy of your credit report from all of the credit reporting bureaus. It is important to make sure the report reflects your debts as satisfied and that any accounts you closed are noted. If you notice any errors, address them immediately so you can start rebuilding your credit.
Even if you start a new job prior to declaring bankruptcy, do not change your plans! Filing for personal bankruptcy may still be the best idea even in their current circumstances. When you decide to file could really make a huge difference. Repayment can be evaluated without new income if the filing is posted earlier.
No one is happy to be bankrupt; sometimes it is the only option. The article you just read should have given you some insight and inspiration on how to proceed with your bankruptcy case. Learning from people who traveled down this road before can make your journey less stressful.