The economy is not in good shape. A lot of people with no jobs find themselves in debt. Debts usually end in bankruptcy which isn’t good. If you or a loved one is considering bankruptcy, find out what to do about this situation by reading this article.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. Not only is hiding income and assets wrong, it is also a crime.
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. Many belongings may become eligible for repossession or seizure after filing for bankruptcy. If you aren’t aware of this, you could lose some assets that you value.
If bankruptcy is an option for you, secure the services of an attorney. Personal bankruptcy is quite complex, and it is entirely possible that you will not be able to familiarize yourself with all the laws and processes. A bankruptcy attorney can advise you on how proceed properly.
Do some research about laws and legislation before filing. This area of law is in constant flux and it is imperative that you know where the law stands at the time you file for your bankruptcy. If you are not sure about the current laws all you have to do is look into what laws have been passed.
Before declaring bankruptcy, be sure you’ve weighed other options. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. You may have luck negotiating lower payments by dealing directly with creditors, but be sure to document any get and new agreement terms in writing from each creditor.
Make sure that you really need to file for bankruptcy. Some people have great luck with handling debt with debt consolidation, which means taking out only one loan to pay off many loans. The whole process of filing for bankruptcy can be a long, and hard one. You will have trouble getting credit down the line. So, consider bankruptcy only as a last resort when you have no other choice.
Chapter 13
Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. This allows you to keep possession of your real estate and property and repay your debt through a debt plan. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Remember that if you even miss one payment that’s due under this plan, the court could dismiss the whole case.
Before you file for personal bankruptcy, weigh all of your options. There are many other options including debt consolidation and making payment plans with your creditors. Loan modification plans can help if you are dealing with foreclosure. This type of plan allows your lender to work with you eliminating charges, extending your loan, and lowering interest rates to help you pay back the loan without drowning in debt. Making arrangements with the creditors to make reasonable payments towards you debt is a much better plan than bankruptcy because the lender simply wants the loan repaid.
Although the entire process can be stressful, do not allow the stress to take over. Bankruptcy is a stressful process: you will have to go over your bad financial decisions and perhaps feel ashamed about your decision. This stress may lead to something worse like depression, so do what you can to fight that from happening. Life is going to get better once you get through this.
If you meet certain requirements, you may be able to get a lower monthly payment on your financed vehicle. Lower payments can sometimes be structured into a Chapter 7 solution. There are a few requirements that you have to meet to be eligible, though. You have to have bought the car more than 2.5 years ago, your loan’s interest rate needs to be over a certain amount, and your employment history has to be good.
Make sure you understand your rights as you file for bankruptcy. It is not unusual for creditors to claim that their debt is not able to be discharged. There are few debts that can’t be discharged. If you are speaking to debt collectors about another type of debt and they tell you it cannot be discharged, check your local regulations. You can report the collectors to your state attorney general if they are lying about this.
Forget about detrimental terms, such as shame, when you are filing for personal bankruptcy. Going through the filing process often brings out the worst in people, causing them to feel a variety of negative emotions. However, having this feeling about yourself isn’t going to help anybody, and your health could even be compromised. Keeping an optimistic view as you deal with your financial woes is the most productive way of dealing with a bankruptcy.
The economy is not in great shape right now, and although things are slowly getting better, there are still large numbers of people out of work and in debt. Just keep in mind that there are resources available to help you to avoid using bankruptcy, even if you do not have steady income. It is our sincere hope that this article has helped you to determine a way to avoid filing for personal bankruptcy yourself, or will help a friend or loved one avoid this fate. Godspeed.
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