Are your finances a mess? Do you believe that filing for bankruptcy is your only choice? Do not feel as if you are on your own. Many people, globally, have had to resort to bankruptcy for their financial hardships. So have a look through the contents of this article to see what you should know about bankruptcy.
One you realize you are in financial trouble and have decided to file for personal bankruptcy you should move quickly. Waiting to the last minute to file bankruptcy can cause a number of issues. You may face negative repercussions such as wage or bank account garnishment or foreclosure on your home. You can also not leave time enough for a thorough review of your financial situation, which will limit your available options.
When you file for bankruptcy you limit your options for many future loan options. Many banks do not forgive bankruptcy and it shows on your credit report for 10 years. Think twice before making the decision to file for bankruptcy. You might want to defer your bills for a couple of months, instead of hurting your credit for 10 years.
Hire a lawyer if you plan on filing for bankruptcy. Personal bankruptcy is quite complex, and it is entirely possible that you will not be able to familiarize yourself with all the laws and processes. Choose an attorney versed in personal bankruptcy to make sure you don’t make mistakes.
Before you consider filing for bankruptcy, you should make a pre-determination if bankruptcy may be the right choice. First, make a list of all income, including, salary, child support, alimony, rent and any other sources you may have. Then, make a list of your bills. These would include mortgage, rent, car payments, monthly credit card payments, groceries and gas. If your monthly bill total is more than the income you bring in, it may be time to seek the advice of a bankruptcy attorney, who can help you make the final decision.
Many times, when a debtor files for Chapter 7 bankruptcy, their home can be protected. This is because of the homestead exemption. This exemption can protect the home, if the debtor owes below a certain threshold. Laws concerning this exemption do vary between states. Be sure to consult with a bankruptcy attorney before, assuming your home is safe from liquidation.
You do not need to be bankrupt to file for personal bankruptcy. In 1898 the term was changed from “bankrupt” to “debtor” so that people could more readily understand that an inability to pay bills is the main qualifying factor in filing for personal bankruptcy. Most people who file are not, in fact, completely bankrupt.
Don’t be tempted to race toward a bankruptcy without taking time to make sure it is the right thing for you to do. It may be that all you really need to do is consolidate some of your debts. Going through a bankruptcy is a long and stressful process. It will affect your access to credit in the future. You only want to file for bankruptcy after you have exhausted your other options for dealing with your debts.
If you filed for bankruptcy, and now would like to restore your credit, be careful on how you do this. There are some legitimate companies out there that do want to help, and will. However, there are also very many companies that are just waiting to take advantage of people who are in a tough situation. So do your research very carefully, when trying to hire one of these companies.
The introduction to this article emphasized that many, many people have filed for bankruptcy in the past and many will in the future. However, others who are filing for bankruptcy do not have the advice that you have just been given. The tips provided above should help you get through bankruptcy.