If you have been put into the position of needing to file for bankruptcy, you are likely not to be very happy about it, but it does not lead to your life ending. The bankruptcy option was created to give you another chance to live a financially responsible life. Keep reading to handle the bankruptcy process in a way that is a rebirth and not a financial Armageddon.
Filing for bankruptcy is something many people are forced to do when there debts become too much of a burden, and they can no longer afford to pay them. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. Each state has its own set of rules regarding bankruptcy. For instance, your home might be protected in some states while you might lose it in others. Before filing for personal bankruptcy, be certain that you are familiar with the laws.
Don’t fear reminding your attorney of any specific details of your case. It is wrong to assume that your lawyer will remember every word you ever utter! Ultimately, this is your bankruptcy and your financial future, so never hesitate to advocate on your behalf.
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. Avoid ever touching retirement funds until you have no other choice. You may need to withdraw some funds from your savings account, but don’t take everything that is there as you will be bereft of any financial backup if you do.
Ensure that you are providing genuine details when filing a bankruptcy petition, because honesty is the best policy when dealing with bankruptcy. Do not hide any income or assets or go on a spending spree before filing for bankruptcy: the court will find out and will not have a positive opinion of you.
Don’t feel bad if you need to remind your attorney about any specifics of your case. Don’t assume that he’ll remember something from a month ago; tell him again. It’s your financial future that is in his hands; don’t hesitate to speak up.
Be aware that getting unsecured credit is going to be tough once you’ve gone through bankruptcy. Secured cards can be a great way to get started if this happens to you. If you pay what you owe back promptly at all times, you can show that you are taking steps to be responsible about your payments and credit rating. Then, in time, it may be possible for you to obtain an unsecured credit card.
It is a good idea for you to hire a bankruptcy to handle your bankruptcy process. There are a lot of things to do during bankruptcy and that may be hard for you to understand on your own. A qualified bankruptcy attorney will guide you through the steps and help you do everything properly.
Chapter 13
Do some research to find out more about Chapter 13 and Chapter 7. If Chapter 7 is what you file, your debts will get eliminated entirely. Your former ties with creditors will cease to exist. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. When choosing the type of personal bankruptcy that is correct for you, it is very important that you know the differences.
Keep with what you have decided to do. You can often have property returned to you. Autos, jewelry and even electronics that have been repossessed, could be returned. If you have any property in repossession that was taken less than three months before filing for bankruptcy, then there are good odds that you can get your property back. Talk to a lawyer for help with the petition filing process.
Safeguard your home. Filing for bankruptcy doesn’t automatically involve losing your home. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. You can also investigate your state’s homestead exemption, an option that might enable you to keep your home if certain financial requirements are met.
Don’t just assume bankruptcy is the right option, especially if you have not considered others. You should consider credit counseling. There are some good non-profit organizations that could help you. They will negotiate with your creditors in order to reduce your payments and interest rates. You pay the organization, and they pay creditors for you.
Don’t take big cash advances off your credit cards in the days prior to filing for bankruptcy. This will be viewed as fraud, and you may be held responsible for the balances despite your bankruptcy filing.
Avoid paying for a consultation with the bankruptcy attorney, but do ask many questions. You can meet with a few lawyers before deciding on one. Most lawyers provide a free initial consultation. Decide which lawyer you like best buy reviewing all of the lawyers’ answers to your questions. Choose the lawyer who addressed your issues the best. You do not need to make a decision immediately after the consult. This allows you time to speak with numerous lawyers.
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. Bankruptcy stays on your credit for quite some time. On the other hand, you can begin improving your damaged credit immediately. One of the good things about bankruptcy is that you can start fresh.
Current Credit
Once you decide to file, it is important to act in a more financially responsible manner. Do not take on more debt or use more of your current credit. Judges may take into account your current credit history, in addition to your past credit history, when considering your bankruptcy case. Try demonstrating that your current behavior and financial habits have positively changed.
Speak to a bankruptcy attorney about what new laws may be going into effect before your bankruptcy filing. Make sure to get the most up-to-date information concerning the bankruptcy laws in your state. To learn about any changes, search the Internet or contact your state’s legislative office.
Filing for bankruptcy doesn’t mean you will lose all your assets. You can keep some personal property. Items like clothes, electronics, household furnishings, and jewelry are included in that category. Depending on the state you are from, what kind of bankruptcy you’re filing, and your specific case, you could be allowed to keep bigger items, like your car or house.
Make sure you hire a good bankruptcy lawyer. Many novice lawyers get their feet wet with personal bankruptcy cases. It is crucial that your lawyer has the proper licensing and has plenty of experience. The Internet can help you check a lawyer’s disciplinary record, as well as client ratings and background information.
As previously stated, the reasons for filing for bankruptcy are not generally a happy fairy tale. It doesn’t have to be that way after bankruptcy. By using the tips from the above article, you can turn bankruptcy into a positive turning point.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. For example, if your debt is small, try a type of consumer counseling program. Some creditors will work with you to help you pay off your debt with lower interest rates, lower late fees, or an extended loan period.