Being buried in debt is a terrifying experience. Once you realize how much in debt you are, it can make you lose your focus on everything else in life. It’s unfortunate that once out of control, debt problems are very difficult to resolve. This article will help you identify some things you can do in regards to filing for personal bankruptcy once your debt levels have spiraled out of control.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. Bankruptcy rules vary by jurisdiction. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. Be aware of bankruptcy laws before filing your claim.
You can find a wealth of information concerning personal bankruptcy by searching for websites which offer information about it. The United States Justice Department, the ABI (American Bankruptcy Institute), as well as the NABCA (National Assoc. Consumer Bankruptcy Attorneys) are excellent sources of information. The more you know, you can be confident you are choosing the right thing and that you are taking the right road to make sure your bankruptcy proceeds as easily as possible.
Be honest when filing for bankruptcy, because hiding liabilities or assets can only cause trouble to you. Your attorney and trustee should be privy to all information about your finances. Don’t hold anything back and formulate a smart strategy to deal with the reality you are facing.
Chapter 7
The two main kinds of bankruptcy are Chapter 7 and Chapter 13. Make sure you understand them so you know what is best for you. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. You will no longer be liable for any money that you owe to your creditors. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. You must know about the different bankruptcy types, and how each can affect you.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. There are other options available, such as credit counseling for consumers. Bankruptcy has a negative effect on your credit reports, in that it is permanently there. Before you take this step, make sure all your options have been considered.
Before filing bankruptcy consider every available avenue. Perhaps just consolidating some of your existing debt, could make them easier to manage. Bankruptcy is a stressful process. It will also harm your ability to secure credit in years to come. You have to make certain that you absolutely have no other choice.
Think about all your options before pulling the trigger. Find out if you can receive a reduced interest rate or altered repayment plan instead of bankruptcy filing. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. There are a lot of ways that your lender can assist you, such as reducing interest rates, eliminating late fees, or extending the term of your loan. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
No matter how careful you are, major life changes can crop up that cause you to lose control of your finances no matter what you do. The article above has some powerful suggestions to get things back in control and manage the issues you face when filling for bankruptcy. Take the advice that was given and make a difference in your life.
Safeguard your home. Bankruptcy filings do not necessarily mean that you have to 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. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.