The thought of bankruptcy has brought feelings of anxiety and fear into the lives of many people. The thought of losing their homes and cars and being overcome by debt is something they rightfully fear. If this troubles you, or if you are dealing with this nightmare now, the following information is required reading.
Exhaust every other option before making the decision to file for personal bankruptcy. Look into other options, such as consumer credit counseling. 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.
Always be honest when filling out paperwork. 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.
Don’t pay for an attorney consultation and ask him or her anything you want to know. You can meet with a few lawyers before deciding on one. Most lawyers provide a free initial consultation. Only make your decision if all your questions and concerns are adequately addressed. You can think about your decision before making a commitment. You can take your time and check out several attorneys before making your final selection.
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 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.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. The Bankruptcy Code has lists of various asset types that are exempt during the process. Make sure to review the list before filing a claim so you know if your valuables will be subject to seizure. If you neglect this important step, you might be blindsided when a possession that is important to you is taken to repay creditors.
Check into less drastic solutions prior to declaring bankruptcy. If you owe small amounts of money, you can join a counseling program or straighten your finances out by yourself. 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.
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Every one of your debts will be gone if you decide to go with Chapter 7. All the things that tie you to creditors will go away. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Before filing bankruptcy consider every available avenue. You might be better off consolidating your debt or availing yourself of some other remedy. Declaring bankruptcy is a very involved process that can cause a good deal of anxiety. The future of your credit will be greatly affected. This is why you must ensure that bankruptcy is the only option left for you.
Chapter 13 bankruptcy might be a good option, so don’t overlook it. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
If you are considering filing for personal bankruptcy, be certain that this is really the right course of action for you. Perhaps consolidating your existing debt can make it easier to manage. Filing a claim can take a long time and cause much stress. The future of your credit will be greatly affected. This is why you must make sure bankruptcy is your last resort.
Don’t file for bankruptcy the income that you get is bigger than your bills. It can seem like bankruptcy can be an easy way to avoid paying back your debts, however it leaves a serious mark in your credit report that can last between seven and ten years.
Those who fear bankruptcy have a good reason to do so: It can be a downright scary experience! If you understand all of the ins and outs of personal bankruptcy, you need not fear it. Take this advice to heart, and do everything possible to improve your situation.