The economic climate in this country has led to an increase in bankruptcies. Collection agencies constantly hunt them down and their bills keep increasing. You may have found yourself in the same situation, and you should know that bankruptcy could be a good option for you. To find out if filing for personal bankruptcy is the right thing for you to do, read on.
Consider all options before deciding to file for personal bankruptcy. Alternatives do exist, including consumer credit counseling. Bankruptcy is a permanent part of your credit, so before you make such a big decision, you might want to explore all other choices so that your credit history is affected as minimally as possible.
If filing bankruptcy is in your future, don’t waste any savings you may have attempting to pay off your debts. No matter what you do, do not touch your personal savings unless there is no other option. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.
It is simple math; when you owe more than you are able to pay off, a bankruptcy is the likely solution. If this sounds like you, start familiarizing yourself with your state laws. Every state has a separate law having to do with bankruptcy. Your house is safe in certain states; however, in other states, it isn’t. Before filing for personal bankruptcy, be certain that you are familiar with the laws.
See if there is an alternative you can use before declaring bankruptcy. If you owe small amounts of money, you can join a counseling program or straighten your finances out by yourself. It is sometimes possible to negotiate smaller payment by yourself. If you do this, make sure you save a written record of debt modifications that are negotiated.
Be sure you know how Chapter 7 and Chapter 13 differ. Chapter 7 is the best option to erase your debts for good. This includes creditors and your relationship with them will become no longer existent. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. It is vital that you know the differences between these types of bankruptcies, in order to find the option that’s best for you.
When it appears likely that you will file a petition, do not start spending your last remaining funds on debt repayment. Retirement accounts should never be accessed unless all other options have been exhausted. You may have withdraw from your savings every now and then, but try to leave yourself some financial security for the future.
Do what you can to keep your home. You do not have to lose your home in the process of a bankruptcy. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
It is important to understand clearly the benefits of a Chapter 7 or 13 bankruptcy. Investigate the benefits and pitfalls of both. Online resources may be able to provide all the information you need. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
If you filed for Chapter 13 bankruptcy, you can still get a mortgage or a car loan. This is harder. Your trustee must approve any new loans. You will need to come up with a budget and show that this new loan payment schedule is doable. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
Do not despair, as it’s not the end of the world. If you file for bankruptcy, you might be able to reclaim certain property that has been repossessed, such as your car, electronics or jewelry. If the items were repossessed less than three months prior to your filing date, you may be able to recover them. Interview and research attorneys before choosing one to help you with your bankruptcy.
As you now know, you have plenty of assistance available for filing bankruptcy. Tackling this in a logical and emotionless manner will relieve you of your debt issues while giving you a fresh start for the future.
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