A lot of folks in modern times are deep in debt. They are harassed by collection agencies and creditors and cannot get their finances under control. If this sounds like you and your situation, filing for bankruptcy may be a good idea for you. To find out if filing for personal bankruptcy is the right thing for you to do, read on.
Millions of Americans file for bankruptcy each year because they can not pay their bills. If this is the case for you, you should begin to investigate the legislation in your state. Each state has their own bankruptcy laws. In some areas, your residence may be completely exempt, but in others, it will not be. You should be aware of local bankruptcy laws before filing.
Do some research online about personal bankruptcy to get a better idea of what this procedure implies. The United States Department of Justice and American Bankruptcy Institute are two such places to look. Knowing is half the battle, after all, and these websites are the first step in learning what you need to know to make your bankruptcy smooth and stress-free.
Visit web sites and read information to learn as much as possible about the topic of personal bankruptcy. The United States DOJ, along with a number of other bankruptcy institutes and attorneys specializing in bankruptcy can give you invaluable information. The more you know, the more you’ll knwo that you’ve made a wise decision and the you’re making sure your bankruptcy goes as smooth as possible.
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. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
Don’t be afraid to remind your lawyer about important aspects of your case. Inaccurate or incomplete information can lead to your petition being denied. All information submitted to the court with your signature needs to be double checked.
You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. You can find a listing of the asset types that are excluded from bankruptcy in the Bankruptcy Code. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. If you neglect this important step, you might be blindsided when a possession that is important to you is taken to repay creditors.
Once the bankruptcy is complete, you may find it difficult to receive unsecured credit. If that is the case, you should try applying for one, or two secured cards. They offer you the chance to demonstrate the seriousness with which you now take your financial obligations. After a certain time, you will then be able to acquire credit cards that are unsecured.
Always protect your house. Losing your home is thought of as common in bankruptcy cases, but it is by no means inevitable. You might be able to keep your home, for instance, if you have two mortgages or if your home has lost its value. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
There are differences between Chapter 13 bankruptcy and Chapter 7; be sure to familiarize yourself with both. Take time to research this online and see the pros and cons for filing each one. If something doesn’t make sense to you, go over it with your lawyer prior to choosing which one to file.
Spend time with loved ones. The process of bankruptcy can prove particularly brutal. It takes a long time, it can be stressful, and people feel unworthy, guilty and ashamed. Lots of people choose to disappear for a while until the entire process is over and done with. On the other hand, isolation of a self-imposed nature can only worsen your feelings, opening the door to mental depression to join your financial depression. Time spent with people who care about you can give you new perspective on your financial situation.
Chapter 13
Consider if Chapter 13 bankruptcy is an option. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. However, if you are unable to properly commit to the plan you agree to, your case can be dismissed.
Spend time with friends and family to keep your stress levels to a minimum through the bankruptcy filing process. The whole process of filing for bankruptcy is hard. It is long, hard and sometimes leaves people feeling guilty or ashamed. Avoidance of friends of family during the process is not uncommon. This is not a good idea because staying alone could cause serious problems with depression. Remember that it is not your families fault for your financial hardships and use this time to pull together and be strong.
You should never feel shame for needing to file for bankruptcy. Many people feel guilty, embarrassed and unworthy when dealing with bankruptcy. Feelings such as these are not of value to you and it is possible for them to be psychologically harmful. Remembering to stay positive as you go through financial difficulties is a great way to deal with your bankruptcy filing.
If you are earning enough to cover your bills, don’t file for bankruptcy. The cost to your credit history far outweighs the simplicity of the easy-out bankruptcy. This is a hard pill to swallow for many.
Although the entire process can be stressful, do not allow the stress to take over. Many people feel a lot of stress while they work through the bankruptcy process. Depression and burn-out from pent of stress will do nothing to help your situation, so it is critical to let go a little. You must realize that things will get better over time.
As you can now see, there is much information available that can help you through your bankruptcy. With an open mind, you will be able to soon get the help you need to help your financial situation.
Do your homework so you thoroughly understand the laws pertaining to bankruptcy before you file. There are many pitfalls you can easily fall into, such as transferring away assets to prevent them from being included in the filing. In addition, it is unlawful for the filer to increase the amount of debt they are carrying on their credit cards right before they file.