Things To Look For When You Think It Is Time To File For Personal Bankruptcy
Filing for bankruptcy can be a viable for anyone who has had their possessions repossessed by the IRS. Bankruptcy can wreak havoc on credit, but it may be the only way out of your situation. The article below discusses some of the pros and cons of filing bankruptcy.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. Laws differ from one state to the other. You may find your home is safeguarded in one state, while in another it isn’t. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. This demonstrates to creditors that you are making a good faith effort to repair your credit. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Stay up to date with any new bankruptcy filing laws. Bankruptcy law evolves constantly, and it’s important to stay up-to-date to ensure that you file properly. Keep up with your current state’s laws and regulations to figure out what steps you should take.
You need to educate yourself on the differences between Chapter 7 and Chapter 13. All debt will be eliminated with Chapter 7. You will no longer be liable for any money that you owe to your creditors. A Chapter 13 filing involves a repayment plan, though. Typically, you will make a partial payment against your debts over the next 60 months before the balance of the debts is lifted. You have to know what differs between all of the kind of bankruptcy, so you know which is one is ideal for you.
Safeguard your home. There are many options available to help protect you from losing your home. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. You are still going to want to check into homestead exemption either way just in case.
Make sure you know how to differentiate between Chapter 13 and Chapter 7. There is a wealth of information online about each type of bankruptcy and their respective pluses and minuses. If you don’t understand the information you researched, consult with your attorney about the details before you decide which type of bankruptcy you want to file.
Look into filing Chapter 13 bankruptcy. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. This allows you to keep possession of your real estate and property and repay your debt through a debt plan. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
Spend time with friends and family to keep your stress levels to a minimum through the bankruptcy filing process. The process of bankruptcy can prove particularly brutal. It can be long and drawn out which adds lots of stress and leaves people feeling empty inside. A lot of people hide away until the entire proceedings have been played out. This isn’t true though because when you isolate yourself you will just start to feel worse and may become depressed. Because of this, it’s vital you keep spending some time with the people you love despite what you are currently going through.
We would like to reiterate that you always have the option of filing for personal bankruptcy. However, you may wish to avoid it because of what it can do to your credit. Learn all that you can about bankruptcy before you file. That way, you will be prepared to make the best decision for a happy financial future.