Some people think bankruptcy is an option for “losers”; those are usually the first people that think differently when bankruptcy affects them. A financial catastrophe, like a major medical emergency, can cause someone to face bankruptcy. If this situation proves to be yours, you can help yourself with the contents of this article.
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. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
Many people need to file for bankruptcy when they owe more money than they can pay off. If you’re in this position, it is a good thing to familiarize yourself with the laws that apply in your area. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. Your home is safe in some states, but in others it’s not. Familiarize yourself with the bankruptcy laws of your state prior to filing.
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. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. 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 fail to go over this list, you may be unpleasantly surprised sometime down the road if any of your most valued items are seized.
Be sure to hire an attorney before you embark upon filing for personal bankruptcy. The topic of bankruptcy is a complicated one and it is important that you know all about it. A qualified bankruptcy attorney will guide you through the steps and help you do everything properly.
Chapter 7
Do some research to find out which assets you could lose by filing for personal bankruptcy. You can find a listing of the asset types that are excluded from bankruptcy in the Bankruptcy Code. You need to read the exemptions for your state, so you know what property you can protect. If you don’t read it, you could have nasty surprises pop up later due to your prized possessions being seized.
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. In Chapter 7 most of your outstanding accounts will essentially be erased. Your former ties with creditors will cease to exist. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.
Protect your house. Filing bankruptcy does not necessarily mean that you will lose your house. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. 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.
Chapter 13 Bankruptcy
You must be absolutely honest when filing for personal bankruptcy. If you try to hide any of your information, it will eventually surface and cause you problems. Whoever provides your legal consultation must be privy to all of your financial information. Put everything out on the table and craft a wise plan for handling the situation the best you can.
Consider filing a Chapter 13 bankruptcy. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. However, if you were to miss a payment, the court would dismiss your case right away.
Understand the rights you have as a bankruptcy filer. Many creditors or bill collectors might tell you your debts cannot be included in a bankruptcy. Most loans can be discharged outside of certain things, like child support or loans you are paying back due to student lending. If you are told differently by a collector, research the information yourself. If you find they are in error, get the name of their company, phone number and any identifying info so you can report it to the attorney general in your area.
Once you have tried every approach to your finances and still find no solution, you may find it necessary to consider bankruptcy. If circumstances beyond your control have brought you to this place, you do not have to be stressed out. You will find that this article contains very valuable information.
Seek a less serious option prior to filing for bankruptcy. For example, you may want to consider a credit counseling plan if you have small debts. Also, if you just contact your creditors and speak to them plainly and truthfully, the odds are good that you can negotiate a better payment structure that you can afford.