What To Know Before You File For Bankruptcy

By Stacey Smith


The circumstances that culminate in a bankruptcy filing are likely unpleasant, though they do not need to define the rest of your life. You are being given the opportunity to start again with a debt-free slate. Continue ahead to learn how you can smooth out the bankruptcy process so it's not a financial disaster.

Before making the decision to file for bankruptcy, be sure to do some research and learn all you can about the subject. There are many websites available that offer this information. You can learn a lot on the U.S. DOJ, along with a number of other bankruptcy institutes and attorneys specializing in bankruptcy can give you invaluable information. The more you know, the more you'll know that you've made a wise decision and the you're making sure your bankruptcy goes as smooth as possible.

Prior to filing for bankruptcy, be sure you have investigated all of your alternatives. You have other options, including consumer credit counseling help. 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. Lying on your filing can cause dire consequences such as: delays, penalties, being prevented from re-filing, or even jail time.

After a bankruptcy, you may still see problems getting any kind of unsecured credit. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. You can exhibit your desire to rebuild your credit this way. Eventually, you could be able to obtain unsecured credit.

If you are about to file for bankruptcy, then make sure you hire a lawyer. Filing for bankruptcy is a complicated procedure, and you may not be aware of all the ins and outs. Choose an attorney versed in personal bankruptcy to make sure you don't make mistakes.

If you are meeting with a lawyer to discuss bankruptcy, the initial consultation should be free so ask every question you have. You can meet with a few lawyers before deciding on one. Most lawyers provide a free initial consultation. Therefore consult with different lawyers and get a feel for them, then decide which one suits your needs It's isn't necessary to make a choice right away. Be sure to talk with a number of lawyers, and compare the information you receive.

Consider Chapter 13 bankruptcy for your filing. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. Typically, any plan you develop will last around 3-5 years. Afterwards, any remaining unsecured debts will be discharged. Remember that missing a payment to the plan will result in your case being dismissed.

Safeguard your home. Filing for bankruptcy does not mean you have to lose your home. Depending on whether the value of your home has decreased or if you have a second mortgage on the home, you may end up keeping it. You may also want to check out the homestead exemption because it may allow you to keep your home.

Find out about lowering the cost of the payment you pay monthly on your car, if you are afraid of losing it. Most of the time Chapter 7 bankruptcy will allow your payments to be lowered. There are qualifications, such as the loan being high interest and a good work record for this option.

Your trustee may be able to help you secure an auto loan or get a mortgage even though you have filed Chapter 13. It's a bit more difficult, though. Before you can take out a new loan, you will have to clear it with your trustee. It is important to make a budget and prove that you are able to afford the payment. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.

If you are thinking about filing for bankruptcy, one of the first things you should do is look into the laws of your state. For instance, you are not allowed to move assets from your name to someone else's for a year before you file. In addition, it's unlawful for a filer to acquire more debt on their credit cards before they file.

Even though the economy is slightly getting better, so many people do not have jobs or are not getting paid enough. You can avoid bankruptcy even with no steady source of income. Hopefully, after reading this article, you picked up on a few of the things that will help you avoid filing for bankruptcy. Hopefully better things await you in the near future.




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