Bankruptcy is something no one wants to experience. Changing circumstances often create a situation where there is no better choice, and knowing how to deal with it is important. If this has happened to you, then use the advice in this article to move forward with your life.
When people owe more than what can pay, they have the option of filing for bankruptcy. If you have unmanageable debt, you need to familiarize yourself with regional bankruptcy laws. When it comes to bankruptcy, states have varying laws. Some states protect your home, and others do not. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
Do some research to find out which assets you could lose by filing for personal bankruptcy. The Bankruptcy Code includes a list of the types of assets that are exempt from the bankruptcy process. You need to compare this list to the assets you own so that you are not surprised when certain assets are seized. If you aren’t aware of this, you could lose some assets that you value.
It is important to understand your rights when filing bankruptcy. Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. If it has been fewer than 90 days since you filed for bankruptcy, it is possible for you to get repossessed property back. A qualified bankruptcy attorney can walk you through the petition process.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Free consultations are standard practice among bankruptcy lawyers, so interview multiple candidates before making a final decision. You should make a final decision only once all of the questions or concerns are sufficiently attended to. There is no need to offer an immediate hire, so take your time. After your consultations, do some additional research on each attorney you consider qualified for the job.
Safeguard your most valuable asset–your home. Bankruptcy filings do not necessarily mean that you have to lose your house. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Consider filing using chapter 13 bankruptcy. With a consistent income source and less than $250k in debt, try filing for Chapter 13. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
If you make more money than you need to pay your bills, you should not file for personal bankruptcy. Sure, bankruptcy can get rid of that debt, but it comes at the price of poor credit for 7-10 years.
Before you choose Chapter 7 bankruptcy, think about what effect that is going to have on any co-signers you have, which are usually close relatives and friends. A Chapter 7 bankruptcy will relieve you of your legal responsibility to pay any joint debts. However, creditors can demand co-debtors pay the amount in full.
Learn and understand the laws and rules regarding personal bankruptcy filings, before you decide to file. Your case may be rife with issues due to pitfalls inherent in codes regarding personal bankruptcy. It is even possible for your whole petition to be thrown out of court due to errors being made. It is important to learn the bankruptcy code before filing bankruptcy. The proceedings will be much smoother with this information.
Be mindful of paying off outstanding obligations before you file a bankruptcy petition. The laws regarding bankruptcy most often prevent you from paying back some creditors for up to 90 days before filing, and friends and family for up to one year. You need to know the law before you decide to file for bankruptcy.
Don’t wait until after filing for bankruptcy to become more responsible with your finances. This includes borrowing money from friends, you want to create a clean slate when you file for bankruptcy. Creditors and judges will consider both past and current history when deciding on your personal bankruptcy. It is important to show that you are committed to acting in a responsible manner going forward.
Filing for bankruptcy doesn’t mean you will lose all your assets. Many times you will be allowed to keep your personal property. In other words, your clothes, your television, your computer, your furniture, your jewelry and other household items are safe. You will need to talk to a bankruptcy attorney to find out whether your local laws and personal situation will allow you to keep your car or home.
Be certain to create a list that displays all the debts you want discharged when you file. If you have debts that are not listed on the paperwork, they will not be included in the discharge. It is up to you to verify that you’ve disclosed all debts so that you won’t end up paying off debts that may have been covered by the bankruptcy filing.
If your finances are tight and you are considering filing for personal bankruptcy, why not put your plans for getting a divorce on the back burner? Many people find they need to claim bankruptcy after divorce because they did not see the financial problems that were ahead of them. Reconsidering divorce is usually the best option in any case.
When you are forced to file for bankruptcy, you should have some excellent knowledge on what to do. When you are properly informed, you make the whole process easier for yourself. Now that you have read the advice shared here with you, you can move forward on the right financial path for you.