Before You File – Everything You Need To Know About Bankruptcy
Bankruptcy can seem like a scary thing to get involved with, especially if you do not know much about it. The truth is, while it has huge ramifications for your financial life, it can be every bit the “fresh start” it was intended to be. Here are some bankruptcy tips that can help you understand a bit more about what you have to do, if you file bankruptcy.
If you have to file bankruptcy, get a lawyer to look over your paperwork before you file. Bankruptcy laws can be very complex, and if you do not have a lawyer, you can get yourself in trouble. Not only are there legal issues that you could face, but you could also end up losing property and cash that you think are protected.
In any personal bankruptcy filing, it is essential to make certain to list all elements of your financial life in your petition and other paperwork. Failing to include all income sources or omitting individual debts and accounts can lead to substantial problems down the road that can limit the dischargeability of some of your most substantial obligations.
Be extra vigilant about your spending habits until your hearing. Judges take a look at your entire financial picture. They even look at the things you are doing right now, to see if you are trying to take advantage of the system. Show that you are now on the right track financially.
Seek a less serious option prior to filing for bankruptcy. For example, if your debt is small, try a type of consumer counseling program. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Become knowledgeable in regards to details about chapter seven bankruptcy vs. chapter 13 bankruptcy. Take the time to find out about each one online, and look at the advantages and disadvantages of each. If you’re really not sure how this all works after your research, meet with your lawyer and ask them prior to making a decision.
Keep in mind that your credit is not necessarily ruined just because you have filed for bankruptcy. But, it is important once you have filed for bankruptcy, that you properly manage your finances. This is the only way that you are going to be able to rebuild your credit the right way.
Shop around for a bankruptcy lawyer. Make use of free consultations, if a law firm offers them. Be sure to check out the attorney’s track record. For other kinds of bankruptcy advisers, do the same and be sure they’re licensed if your state requires it. Don’t ever pay debt negotiation firms any cash up-front and be sure you can pay based on the result. Don’t hire someone who doesn’t have good references or makes you feel uncomfortable.
If you are planning to file for bankruptcy, you must seriously take into account anyone who has cosigned on a loan for you. For instance, if a friend or relative is a cosigner on your auto or home loan, they will be held financially responsible to pay the debt in the event you file for bankruptcy. This can create problems in relationships between family members and friends. That is why it is not advisable to cosign for anyone or ask someone to cosign for you, including your children. It could ruin someone’s life.
Avoid large cash advances from credit cards when considering bankruptcy. You may think these debts will just be washed clean, but you are wrong. This is considered fraud, and even after bankruptcy you can be forced to pay all of that money back to the credit card company.
Don’t let bill collectors mislead you. When you discuss bankruptcy with some bill collectors, they may tell you that bankruptcy will not affect them, and you will still have to pay them. They are not being honest, all of your bills can be covered depending on the bankruptcy option that you fiel.
Before you decide to file bankruptcy, you should think of ways to become more financially responsible. Avoid running up current debts or taking on new debt just before filing for bankruptcy. In the course of a personal bankruptcy filing, your creditors and the court will examine your credit history right up to the filing date. Let them see how you are making positive changes to your personal financial management by demonstrating what you are doing right now.
Get a secured credit card after filing for Chapter 7 bankruptcy. A secured card requires you to put down money in order to open the account. However, if you use the card responsibly and pay it off every month, you can raise your credit score. So, within a few years of filing, your credit will be good enough to get you into an apartment or allow you to purchase a new vehicle.
Have a credit report done before you file for bankruptcy. This will give you a list of debts that you have, and therefore give you a place to start when listing your debts for your bankruptcy filing. Make sure that there are no mistakes on it, and make sure to give it to your bankruptcy lawyer.
No matter how trivial you may think it is, all income should be reported in your bankruptcy filing. You can create issues in your bankruptcy if your income information does not flush with bank and finance records. Be sure to include all incomes within the household that can be considered part of your normal income.
When trying to decide if bankruptcy is right for you, make sure you first look into other options first. Contact the credit card companies and see if they will work with you. Liquidate your assets to pay your bills. Look into debt consolidation. Bankruptcy should be considered as a last resort, so make sure that you do not just jump into it.
Chapter 13 Bankruptcy
If you have filed for Chapter 13 bankruptcy, but realize that you are unable to meet your payment obligations, you may be able to convert to a Chapter 7 bankruptcy instead. To qualify for the conversion, you must never have converted your bankruptcy before and also undergo a financial evaluation. The laws surrounding this process are always changing, so be sure to talk with an attorney who can help you navigate this process.
Consider filing Chapter 13 rather than Chapter 7, if you are facing foreclosure. A Chapter 13 bankruptcy allows you to create a restructured payment plan which includes your mortgage arrears. This will allow you to get your mortgage payments current, so that you won’t lose your home. Chapter 13 doesn’t require you to turn over property, so you don’t have to worry about the homestead exemption, either.
Make sure that you understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. Every one of your debts will be gone if you decide to go with Chapter 7. You will be removed from any contracts you have with your creditors. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. Look into both types of bankruptcy before deciding which one would suit your particular needs.
If you choose to file Chapter 13 bankruptcy, be sure that the amount of your monthly payments is within your reach. If you set a payment that is more than you can afford, you may face a court order of liquidation of all of your assets. You will lose everything by falling behind on payments.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Spend time researching the advantages and disadvantages of filing for each one of these. If the information you read is unclear to you, take the time to go over the specifics with your lawyer before making a decision on which type you will want to file.
If you have co-signers on car loans, or others who are responsible for your bills, consider filing for Chapter 13 bankruptcy if you want to help them. If you file for Chapter 7, you may not have to pay anymore, but they are still responsible. Talk to the people involved, and think carefully before making a choice.
Consider if Chapter 13 bankruptcy is an option. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. Not only can you repay your debts through consolidation, personal property can be kept, as well as real estate. Typically, any plan you develop will last around 3-5 years. Afterwards, any remaining unsecured debts will be discharged. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Filing for Chapter 13 bankruptcy will not prevent auto loans or mortgages from being obtained. There will, however, be obstacles. You will need to secure the trustee’s approval for any new debt obligation. Document your budget to prove that you’re going to be able to make the payments. You should also be prepared to explain why you need to purchase the item.
You can change your Chapter 13 bankruptcy payments in certain situations. While your payment amount will be set up for 3 to 5 years, if there is a change in your situation, you may be able to amend it. A decrease in income, such as, a pay cut, or a sudden increase in expenses, such as, a medical condition, may allow you to amend your monthly payments. You may be able to reduce the payment accordingly, or in some cases, suspend your payment for a certain amount of time.
Make sure you are current on your taxes before filing for Chapter 13 bankruptcy. You can’t qualify if you’re missing any tax returns from the past five years. If you are not current at the time you file, talk to your attorney about filing a motion so that you can get additional time to file taxes before your case is considered.
Filing for bankruptcy can be easier to handle, if you have the right information at your fingertips. Hopefully, this article has provided you with information that is value and relevant to your quest for information about bankruptcy. Use the tips laid out here as a guide, and you will soon see your financial outlook improve.