A lot of people in this day and age are deeply into the debt trap. They are harassed by collection agencies and creditors and their finances under control. If you are in that situation, you may have started thinking about filing for bankruptcy. The article will help you to decide if bankruptcy is right for you.
When people owe more than what can pay, they have the option of filing for bankruptcy. If this sounds like you, start familiarizing yourself with your state laws. Bankruptcy rules vary by jurisdiction. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. It is important to be cognizant of the laws in your state before filing for bankruptcy.
You have other options available like counseling for credit counselling services. Bankruptcy stays on your credit for a whole decade, so before you take such a large step, it is in your best interest to make use of them.
You might find it difficult to obtain an unsecured credit card or line after a bankruptcy. If so, instead you should turn your attention to secured credit cards. This will allow you to start building a good credit worthiness. After a time, you may be able to get unsecured credit again.
You should check with the personal bankruptcy resources available online to educate yourself thoroughly before you begin the process. The United States Department of Justice and American Bankruptcy Institute are two such places to look. The more knowledgeable you are, the more you can be sure that you are making the right decision and that you are taking the right steps to ensure your personal bankruptcy goes as smoothly as possible.
Instead of relying on random selections from the phone book or Internet, try your hardest to find one with a personal recommendation. There are plenty of companies who know how to take advantage of people who seem desperate, so always work with someone that is trustworthy.
The federal statutes covering bankruptcy can tell you exactly which assets are exempt during the process. If you are not aware of the rules, there is a chance that you might get nasty surprises when they take your things away.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
The professional that helps you choose to file with needs to know both the good and accurate picture of your finances.
Filing for personal bankruptcy may possibly enable you to reclaim your personal property that have been repossessed, including cards, electronics and jewelry items. You may be able to get your possessions back if the repossession occurred fewer than 90 days ago. Speak to a lawyer who will provide you with guidance for the entire thing.
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. Unless there is no other choice a retirement account should not be used. Your savings accounts offer valuable financial security so try to leave them intact.
Filing for bankruptcy does not mean that you have to lose your home. You might be able to keep your home, contingent on certain factors, if you have two mortgages or if your home has lost its value. You are still going to want to check out the homestead exemption because it may allow you to keep your home.
Chapter 13
If a personal recommendation comes your way, this should be a lawyer you focus on. There are many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.
Consider if Chapter 13 bankruptcy. If you have a regular source of income and less than $250,000 and you have consistent income, Chapter 13 will be available to you. This plan normally lasts from three to five years, your unsecured debt will be discharged. Keep in mind that even missing one payment can be enough for your case.
If you are moving forward with a Chapter 7 bankruptcy, consider the ramifications that filing a Chapter 7 bankruptcy will have. However, if you had a co-debtor, which spell financial disaster for them.
There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Make sure you know what each entails so you can make the right choice. Chapter 7 eliminates all debts. The ties with the creditor will be broken. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
Bankruptcy is a difficult time that always leads to lots of other physical and emotional issues. To help yourself deal with this stressful situation, make sure you hire a reputable bankruptcy attorney. Do not choose your attorney based solely use cost to determine whom to hire. It is not necessary to hire a costly attorney; just make sure he or she is qualified to handle your case. Make sure people who have experienced bankruptcy give your circle of friends and the BBB. You could even attend a court hearing and observe lawyers handling their cases.
You have undoubtedly gleaned from the text above that bankruptcy doesn’t have to be a difficult process as long as you’re informed. Tackling this in a logical and emotionless manner will relieve you of your debt issues while giving you a fresh start for the future.
Safeguard your home. It isn’t inevitable that you will lose your house when you file for bankruptcy. You can still keep your home, it just depends on your specific situation and the value of your home. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.