Personal Bankruptcy: Is It The Right Choice For You?

by Dori Tery on February 13, 2016

Many people look down on people who have to file for bankruptcy, but change their tune when their debts become untenable. A financial catastrophe, like a major medical emergency, can cause a situation that can only result in bankruptcy. If this situation proves to be yours, you can find help by using the advice in this article.

Bankruptcy Laws

If you are in this position, you should read up on the bankruptcy laws in your state. Each state has its own set of rules regarding personal bankruptcy. For example, the personal home is exempt from being touched in some states, but others do not. You should be aware of local bankruptcy laws for your state before filing.

Always be honest when it comes to your bankruptcy petition.

Don’t be reluctant to remind your lawyer about something she has missed. Don’t assume that the attorney will remember something you told him weeks ago. This is your bankruptcy and your future, so don’t be scared to mention it.

Chapter 7

Be certain that you can differentiate between Chapter 7 and Chapter 13 differ.Chapter 7 bankruptcy completely wipes out your debts for good. You will be removed from any contracts you owe to your creditors. Chapter 13 bankruptcy allows for a payment plan that takes 60 months to work with until the debts go away.

Be certain you talk to the lawyer, not their paralegal or law clerk, instead of a paralegal or assistant; those people aren’t allowed to give legal advice.

Be certain that bankruptcy really is your best option. You may well be able to get away with going through debt consolidation to help make the payments easier to deal with. It is not a quick and easy process of filing for personal bankruptcy. Your future credit will be impacted for many years.This is why you must make sure bankruptcy is your other debt relief options first.

Don’t file bankruptcy the income that you get is bigger than your debts. While filing may seem simple and a way to get out of paying your debts, it is a stain that will remain on your credit report for seven to ten years.

That stress can cause depression, if you don’t take the right steps in fighting it. Life will get better after you get through this.

In order for this to succeed, your car loan must be one with high interest, have a higher interest loan for it as well as a consistent work history.

For example, it’s prohibited for an individual to transfer assets to someone else a year before filing for bankruptcy.

Gain all the knowledge of bankruptcy that you file. There are several pitfalls when it comes to the code pertaining to personal bankruptcy that can lead to a lot of unwanted issues. Some mistakes can even lead to having your case dismissed. Make sure you have a decent understanding of the bankruptcy before you make any final decisions. This will make the entire process much simpler.

It is not uncommon for those who have endured a bankruptcy to promise to never again use credit again. This is actually a poor idea because you still need credit helps to build good credit. If you do not rebuild your credit rating, then it will be very difficult to get your credit score high enough to be able to purchase things like a car or home in the future.

Filing for bankruptcy doesn’t mean that you lose all of your assets. Personal belongings that fall under private property can be kept. Some included items are: electronics, furniture, clothing and even jewelry. This will depend on your state’s laws, your finances, and your financial situation, but you could hold onto your large assets like the car and the family home.

After exhausting every avenue for resolving your financial debts, bankruptcy may be a necessity. Do not let this situation cause too much stress for you. You may be better prepared for the bankruptcy process after you’ve taken taken a look at this article.

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