How To Avoid The Pitfalls Of Personal Bankruptcy

by Dori Tery on January 9, 2016

Those who face personal bankruptcy sometimes feel negative emotions, irritation and shame. People who experience bankruptcy often wonder how to take care of their debts. As you will soon learn, options do exist for those facing financial difficulty.

You can find services like counseling for credit counselling services. Bankruptcy will leave a permanent scar on your credit report and before you take this huge step, so if there are less drastic options that will solve your credit problems, it is in your best interest to make use of them.

You may still have trouble with getting unsecured credit after a bankruptcy. If so, apply for a secured card or two. This will show people that you’re seriously trying to restore your credit record back in order. After using a secured card for a certain amount of time, you are going to be able to have unsecured credit cards too.

The professional that helps you choose to file for bankruptcy has to have a complete and accurate picture of your finances.

Chapter 7

Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves the best option to erase your debt. All happenings with creditors will go away. Chapter 13 bankruptcy though will make you work out a five year repayment plan that takes 60 months to work with until the debts go away.

Filing for bankruptcy does not mean you will end up losing your home. Depending on certain conditions, you might be able to keep it. You may also want to check out the homestead exemption either way just in case.

Don’t file for bankruptcy if you can afford to pay your debts. Although bankruptcy may feel like a simple method of getting out of your large debt, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.

Before you choose Chapter 7 bankruptcy, you should consider what your bankruptcy might have on others, which are usually close relatives and friends. However, if you had a co-debtor, which spell financial disaster for them.

Know the rights when filing for bankruptcy.Some bill collectors will tell you that your debt with them can not be bankrupted. Only a few kinds of debt, including child support and tax liens, are ineligible for bankruptcy. If your creditors are telling you any other kind of debts cannot be cancelled, report the collector to the attorney general’s office in your state.

Make sure you act at the appropriate time. Timing can be critical when it comes to personal bankruptcy filings.Sometimes, you may need to file quickly; however, while other times, you should wait until the worst is over. Speak with a bankruptcy lawyer to discuss the ideal timing is for your personal situation.

Research your state’s bankruptcy before you file. There are some clauses within bankruptcy that could lead to issues with your case. Some mistakes could lead to your case dismissed. Do the proper research as possible about bankruptcy before taking the next step. This can save you a lot of time and make things easier in the entire process easier.

Now you can probably see that filing for personal bankruptcy protection does not mean your finances are doomed forever. Although it is hard at first, you will get through it. Take the information that has been provided here to you and you can turn this situation around for the positive.

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