Are You About To File For Personal Bankruptcy? See These Tips First!
These days, the word “bankruptcy” is about as common as the word “the.” Many people can thank the economy for that! However, before selecting this option make sure you know everything you need to know before you head too far down the path. This article will help you to make the best choices.
Generally bankruptcy is filed when a person is facing insurmountable debt. If this describes your situation, it makes sense to become familiar with relevant laws. Different states have different laws regarding bankruptcy. You may find your home is safeguarded in one state, while in another it isn’t. Do not file before learning about the bankruptcy laws in your state.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. You have better options. For example, you could try credit counseling. Bankruptcy permanently affects your credit, so avoid filing until you have exhausted all of your other options.
Getting unsecured credit post-bankruptcy will likely be difficult. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. Having a credit card of any type will allow creditors to realize that you’re attempting to work in the right direction to repair your credit. Once you’ve built up a history of on-time payments, you may start getting unsecured credit again.
Rather than checking online, try to get recommendations from friends or family about a suitable bankruptcy attorney. There are lawyers out there who will take advantage of your financial state and not deal honestly with you. Make sure your filing process goes as well as possible by finding a trustworthy lawyer.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Most lawyers offer free consultations, so consult with a few before settling on one. Make a choice only if you have received good answers to all the questions and concerns you brought to the table. You do not have to give them your decision right after the consultation. You could even go to different lawyers for advice.
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. Chapter 7, for example, will wipe away every one of your outstanding debts. This includes creditors and your relationship with them will become no longer existent. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. It’s important to know what differences come with every type of bankruptcy. This will let you find out what’s best for you.
Protect your house. Filing for bankruptcy does not guarantee that you will 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. You can also investigate your state’s homestead exemption, an option that might enable you to keep your home if certain financial requirements are met.
Don’t hide from your friends and family while you go through bankruptcy. The whole process of filing for bankruptcy is hard. It is extremely stressful and long, and it can leave you feeling ashamed of yourself. There are a number of people who wish to go into seclusion while undergoing the process of personal bankruptcy. This is not recommended because you will only feel bad and this may cause you to feel depressed. Spend time with your family, talk about your problems and find things that relax you.
Bankruptcy should not be filed by anyone who makes more than their bills cost. Although bankruptcy might seem to be an easy way of being able to pay for your debts, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.
You should weigh every option before thinking about bankruptcy. You may qualify for alternatives such as debt repayment plans or interest rate reductions. Ask your bankruptcy attorney about these options. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. 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 push comes to shove, creditors want their money, and they are willing to make concessions to get it and prevent the debtor from declaring bankruptcy.
As you read at the start of this article, bankruptcy has become a very common process now due to the economy. To help you make good decisions regarding bankruptcy, consult with this article and use the knowledge to your advantage.