While bankruptcy is often a last-resort measure, sometimes it’s simply unavoidable. There are times when bankruptcy is the last option left, even if it substantially damages your credit score. Continue reading for more information about how and why to file for bankruptcy.
Be certain you understand all you can about bankruptcy by researching reputable sites that offer good information. The United States Department of Justice, the American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys, all provide valuable information. Knowing as much as possible about bankruptcy gives you an advantage and will help you make the best decision possible.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. Retirement accounts should never be accessed unless all other options have been exhausted. You may need to use some of your savings; however, you should not use all of your savings. Remember that you must safeguard your future financial security.
Credit History
Before undertaking the bankruptcy process, ensure you have made the correct decision. You have other options, including consumer credit counseling help. Bankruptcy can leave your credit history permanently marked. Prior to doing this you need to be sure you try everything else first to get your credit history into shape and to lessen the impact.
Ensure that you are providing genuine details when filing a bankruptcy petition, because honesty is the best policy when dealing with bankruptcy. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
Be sure to bring anything up repeatedly if you are unsure if your lawyer is focusing on it. Inaccurate or incomplete information can lead to your petition being denied. Speak up if something is troubling you, as this is your future we are talking about here.
Be honest when filing for bankruptcy. Don’t hide liabilities or assets, as they’ll come back and haunt you. Your bankruptcy lawyer has to know every detail of your finances, whether bad or good. Don’t withhold information, and create a smart way of coping with the reality of the situation.
If you’re going to file bankruptcy, you need an attorney. The topic of bankruptcy is a complicated one and it is important that you know all about it. A bankruptcy attorney can help yo,u and make certain you can do things the right way.
Bankruptcy Laws
When looking for a lawyer to handle your bankruptcy claim, the best way to go is off of a personal recommendation instead of simply flipping through the phone book. There are many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.
Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. The laws change a lot, so you need to look them up and have a better idea of how to properly approach the bankruptcy process. Your state will have a website to check, or a number you can call, to learn the latest changes in the bankruptcy laws.
Protect your house. Filing bankruptcy does not necessarily mean that you will lose your house. There are mitigating factors, such as lose of value, or multiple mortgages. You could also check out the homestead exemption. This lets you continue living in your house, depending on whether you meet certain financial requirements.
Think about all your options before pulling the trigger. Before filing, talk with an attorney who can help you weigh all of your options. You can apply for a modification of your mortgage if your home is going into foreclosure. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. Above all else, what creditors want is to get their money. Sometimes they would rather settle for a repayment plan instead of a debtor who is bankrupt.
Learn all the latest laws before you file bankruptcy. The laws change a lot, so you need to look them up and have a better idea of how to properly approach the bankruptcy process. Keep up with your current state’s laws and regulations to figure out what steps you should take.
Don’t forget to enjoy your life once your finances get fixed. Many debtors stress-out during the time of filing. It is essential to cope with this stress well, to prevent becoming depressed. Once the process is complete your life will improve.
Know the laws and guidelines about bankruptcy before you formally file. There are several pitfalls with personal bankruptcy that can make your case harder to handle. If the regulations are not followed, your case may be subject to a dismissal order. Thoroughly research bankruptcy before you make the decision to file. Doing so will make the process a lot easier.
Filing for bankruptcy may damage your credit less than missing debt payments. Your credit report will show your bankruptcy for the next ten years, but it will also allow you to start working towards repairing your credit immediately. A fresh start is a great benefit of bankruptcy.
Determine if bankruptcy is necessary. Consolidating current debt could make it easier to manage. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. The future of your credit will be greatly affected. This is why you must make sure bankruptcy is your last resort.
An attorney who specializes in bankruptcy law can be a good investment if you find yourself thinking about filing. Your lawyer can determine if you eve need to file, and if you do, act as an advocate in court and make the process go more smoothly. Also, a lawyer can assist you with paperwork and give you the answers you are looking for.
No matter what’s going on, make sure you tell the truth about your situation. It is never a good idea to lie about debt or assets. In fact, it is against the law. You may go to prison if you lie when recording your assets and debts.
If you make a mistake and the judge dismisses your personal bankruptcy case, it is possible to file again. Generally, you are only granted an automatic 30 day stay if your case is dismissed. You may find it possible to have this stay extended by meeting with the judge and demonstrating that the reason you need to re-file is a good one.
Make sure you are acting at the appropriate time. In bankruptcy filing, timing is quite important. Sometimes you should file immediately; however, there are times when it is better to delay until the worst has passed. Speak with a lawyer specializing in bankruptcy in order to learn when you should file your petition.
Chapter 7
Filing bankruptcy under Chapter 7 does not mean all your debts are going to disappear. Certain debts are secured and will have to be reaffirmed through a new agreement: for instance, student loans cannot be erased by filing for bankruptcy. For instance, child support debts, court fines and alimony obligations cannot be discharged in Chapter 7 cases.
If you have decided to file personal bankruptcy, first educate yourself as much as you can with your state’s bankruptcy laws. Your future finances are in jeopardy, so you must be prepared and stay proactive by being involved with your attorney and your case. Doing this will guarantee you a more successful outcome and a positive financial future.
Do not pay off debts blindly before you file a personal bankruptcy. Bankruptcy laws prohibit some creditor payoffs within 90 days of filing. When it comes to family members, a year is the cutoff for payoffs. Read up on the rules before you make any decisions about your finances.
It may be hard to file for personal bankruptcy if the main debts you have are student loans. The majority of states have very tough laws in regards to discharging student loan debt. If you wish to discharge student loan debt, it is necessary to demonstrate undue hardship for extreme hardship.
As you can see by now, you do have the option of filing bankruptcy. The consequences for your credit make it a last resort in most cases. Knowledge is power when it comes to bankruptcy.