Filing for bankruptcy is not a pleasant experience. Bankruptcy can indicate financial troubles, and is a generally embarrassing topic to discuss with others. With the solid advice in the article below, you may be able to make a better choice.
Consider all options before deciding to file for personal bankruptcy. You have other options, including consumer credit counseling help. Bankruptcy stays on your credit for a whole decade, so if there are less drastic options that will solve your credit problems, it is in your best interest to make use of them.
You should check with the personal bankruptcy resources available online to educate yourself thoroughly before you begin the process. The U.S. Department of Justice, American Bankruptcy Institute, along with many other websites can provide you with the information you need. 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.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. You should never touch your retirement accounts, unless you have absolutely no choice. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
Ask those you know if they have an attorney to recommend, instead of finding one on the Internet or in the phone book. There are so many dime-a-dozen companies out there who make it a practice of preying on financial desperation. You need to make sure your bankruptcy goes smoothly, so find someone you know you can trust.
Before you file for bankruptcy, find out which of your assets will be exempt from seizure. The Bankruptcy Code lists assets considered exempt from being affected by bankruptcy. Make sure that you carefully look over this list prior to filing to discover if your valuable assets will be seized. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
Always be honest with the information you give about your finances. Not only is hiding income and assets wrong, it is also a crime.
Before you decide to file bankruptcy, be sure to check for any new laws that may apply to your case. Make sure to get the most up-to-date information concerning the bankruptcy laws in your state. To learn about the changes, you should check out the website of your state’s legislation or you can call their office.
Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. There are numerous programs out there that may assist you with your debt, like a credit counseling program, a nonprofit group, government assistance, etc. It is sometimes possible to negotiate smaller payment by yourself. If you do this, make sure you save a written record of debt modifications that are negotiated.
Make sure your home is safe. Bankruptcy filings don’t necessarily have to end in the loss of your home. You might be able to keep your home, for instance, if you have two mortgages or if your home has lost its value. Otherwise, try looking into house exemptions that may let you remain in the home if you meet certain financial threshold requirements.
You should not have to pay for an initial legal consultation, and such meetings are great opportunities to ask lots of questions. When you arrive at a consultation ask plenty of questions. You should also seek free consultations from several attorneys prior to choosing one. Make your decision after all of your questions have been answered. You don’t need to decide what to do right away. This will give you extra time to interview several attorneys.
If you make more money than what you owe, filing for bankruptcy is not a good option. Although bankruptcy might seem to be an easy way of being able to pay for your debts, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.
If you have filed for Chapter 13 bankruptcy, you will still be allowed to apply for and receive a mortgage or car loan. There are extra hoops to jump through. You need to speak with your trustee so that you can be approved for a new loan. Create a budget and prove that you will be able to afford it. You also need to be prepared to answer questions about your need for the new item.
File when the time is right. The timing of your filing could be important to its success. Sometimes, you may need to file quickly; however, at other times, you should wait until the worst is over. Talk with a bankruptcy attorney to find out the ideal timing for filing based on your particular situation.
Investigate any new laws before deciding to file a bankruptcy. The laws are constantly undergoing changes, so you must stay on top of them if you are going to file for personal bankruptcy correctly. To find out about these changes, you can look at your state’s legislation website or contact their office.
Take a look at all of your financial options before filing for personal bankruptcy. For example, you may want to think about credit counseling. There are some good non-profit organizations that could help you. These companies lower your interest and payments by working with your creditors. Often, they make the payments to your creditors, and you make your payment to them.
Realize that bankruptcy may be better for you when it comes to your credit. Continuing to miss your payments can be really bad on your debt. Although your credit will take a big hit, you can begin to repair it immediately after filing bankruptcy. A fresh start is a great benefit of bankruptcy.
Make sure to include all of the debts that you want eliminated on your bankruptcy filing papers. If you don’t include all your debts, the ones you leave out won’t be covered by the bankruptcy. It is imperative that you take responsibility to let the court know about all debts by the deadline they give you.
Consider Chapter 13 bankruptcy. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. The plan is usually for a term of three to five years, and a discharge will be granted at the end of that term. Consider that if you even miss one payment, your case will not be considered by the court.
You may not want to delay your bankruptcy if you secure a higher-paying job just prior to filing. It still may be ideal to file for bankruptcy. The time frame of your filing may be critical. If you get your filing posted before you start gaining new income, your means of repayment will be evaluated without taking it into account.
As you can see, you don’t need to surrender to bankruptcy. The tips laid out here will guide you toward the right road so you can avoid bankruptcy. Use the information you have learned here, and see how you can revamp your finances and protect your valuable credit history.