Nowadays, more and more people are facing the sad reality that they have no choice but to file for bankruptcy. The economic downturn has played a large role. Just because it’s more commonplace doesn’t make it simpler, however. So before you decide to file a claim to get out of debt, you first need to ensure that you understand the implications of the entire process. This article is going to give you that knowledge.
When people owe more than what can pay, they have the option of filing for bankruptcy. When you are faced with this issue, begin to familiarize yourself with your state’s laws. Bankruptcy laws vary from state to state so it is important to do your research. You may find your home is safeguarded in one state, while in another it isn’t. It is best to become familiar with your state’s laws regarding bankruptcy before you take the steps to file.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. You must avoid the temptation to conceal any valuables, money or other assets from the courts. If they find that you have lied, you may be faced with fines, penalties or the inability to file in the future.
Never lie about anything in your bankruptcy petition. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Unsecured Credit
It can be difficult to obtain unsecured credit once you have filed for bankruptcy. If you find yourself in this situation, you may want to think about getting a secured card or two. This demonstrates to creditors that you are making a good faith effort to repair your credit. In time, you might be granted unsecured credit again.
You might experience trouble with getting unsecured credit after filing for bankruptcy. A great way to rebuild your credit is to apply for a prepaid credit card. This will demonstrate that you’re seriously trying to restore your credit. When you have done well with secured cards for a while, you should be able to obtain an unsecured credit card.
Don’t file for bankruptcy until your represented by an attorney. Bankruptcy is a complex process, and you probably don’t know all the information that is required to navigate it. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.
There are many ways to resolve financial difficulties other than bankruptcy, and you should investigate all of them first. Speak with an attorney who specializes in bankruptcy to find out if alternatives, such as a debt repayment plan or a reduction of your interest rates, might be better for you. A plan that can be useful when foreclosure is looming is a loan modification. 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. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
Once the initial filing period is over, ensure that you are getting out and enjoying life. The filing process is extremely stressful for a lot of the people who go through it. Stress easily leads to depression, if you are not maintaining control of your emotions. After you have finished filing for personal bankruptcy, your life will improve.
Be sure that bankruptcy really is your best option. Perhaps consolidating your existing debt can make it easier to manage. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. It will affect your access to credit in the future. Therefore, you must make sure that there is no other option that you could take before you file for bankruptcy.
Chapter 7
When you are looking at a Chapter 7 personal bankruptcy, you may well have debts to worry about for which you share responsibility with another person, such as a spouse, family member, or business partner. If you choose Chapter 7, you are no longer responsible for joint debts. Any co-debtor may well be held responsible for paying off the total remaining amount of the debt, though.
It is possible to obtain new vehicle and home loans while a Chapter 13 case remains active. It is more difficult. You must meet with a trustee to gain approval for a new loan. Document your budget to prove that you’re going to be able to make the payments. Also, be sure you can provide an explanation as to why this purchase is necessary.
Remember to spend some quality time with your loved ones. Going through a bankruptcy is never easy. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. Some folks tend to stay in the shadows until their case has concluded. But, keeping to yourself is likely to cause even greater sadness and despair. Therefore, it is important that you continue to spend quality time with your loved ones despite, in spite of your current financial situation.
Take action when the time is right. They say timing is everything, and this rings true when filing for bankruptcy. In certain situations, you should file right away, but other situations will warrant you waiting. Consult with an attorney who specializes in bankruptcy so you know when it is a good time to file.
Consider all of your options before filing for bankruptcy. You should consider credit counseling. You can get assistance from non-profit companies. They can help you to lower both your debts and interest owed to creditors. Payments are then made to the creditor via the counseling service.
It is important not to delay the process of determining whether or not you should file for bankruptcy. It might seem a little scary, but if you wait forever to act, you’ll just be waiting that much longer once you do ultimately file. The time to seek out professional advice on bankruptcy is as early as possible. Your financial situation will get complex very quickly, so wise counsel is more valuable the earlier you get it.
Do not file for bankruptcy if your income is greater than your bills. Sure, bankruptcy can get rid of that debt, but it comes at the price of poor credit for 7-10 years.
As said previously, bankruptcy is a popular topic due to the declining economy. To make certain you are making wise choices about bankruptcy, make certain to use the information in this article.