Bankruptcy is a tough decision for people to make, but in many situations, it is the correct choice. The best way to approach the situation is with an education about the process. Read the below article for excellent advice from people who have personally went through bankruptcy.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. Not only is hiding income and assets wrong, it is also a crime.
Locate an online support forum for those who have filed for bankruptcy. This way, you can ask other people questions and find out things that you may not know. There are a lot of forums on the internet, but there are also, some offline groups you can join, if you prefer being offline. Because these people know what you’re going through, they can make you feel better about the situation.
Do some research. There are two main types of personal bankruptcy – Chapter 7 and Chapter 13. Chapter 7 will eliminate the majority of your debt while Chapter 13 restructures it to give you time to pay it off. Each one has different rules on what assets you are allowed to keep. So, ask a lot of questions before you decide which one is the best fit for your situation.
Do not jump the gun, and file for bankruptcy too early. Filing at the wrong time could leave you with more debt than you had before. It also means that you will not be able to file against those debts. All debt must be listed on your initial application for it to be included.
Keep your head up. Getting depressed about the situation you are in will not help. Many times, bankruptcy seems like it is going to be bad, but often, it is the best thing you can do at the time. You will have a fresh start and a better financial future, if you learn from your mistakes.
You may want to see if you can get lower payments on your vehicle if you want to keep it. Many times, payments can be lowered through Chapter 7 bankruptcy. You must have bought the car 910 or more days before you filed, the loan must have a high interest rate, and you have to have a secure and steady working history in order for that to work.
Visit your primary care doctor for a complete physical prior to filing for bankruptcy. If you wait until after you begin the process, you will not be able to claim your medical bills on your bankruptcy. This is especially helpful if you do not have any kind of health insurance.
Don’t repay personal debt to friends and family before filing for bankruptcy. Although you may feel obligated to pay these people back first, it is not a wise decision. Because you must reveal this information when you file for bankruptcy, the trustee can legally ask for this money back or sue for it.
Do not go and apply for quick loans when you know that you are about to file for bankruptcy soon. You may think of this as free money, but if your lender realizes that this was why you applied for the loan you can be prosecuted and made to pay back the money.
Be completely up front and honest about your situation and assets to avoid courts from dismissing your case. If the court catches you deliberately hiding assets or income, it can bar you from filing and even refilling for bankruptcy on debts that you have listed within the petition. This makes it impossible to remove debts.
If you plan to pay debts off before you file for bankruptcy, be careful. There are bankruptcy laws which forbid repayment of some creditors within three months before filing. In the case of family members, this period of time may extend to a full year. Read the rules before making financial decisions.
Try to file for Chapter 13 bankruptcy rather, than Chapter 7 if you can possibly do so. Chapter 13 is less detrimental to your credit because, you pay some of your debts back via a structured repayment plan rather than liquidating assets. In addition, you don’t risk losing property in a Chapter 13 case.
If you want to try to avoid bankruptcy, you have to do everything you can to reduce your expenses. Sit down and write-up every expense you have for the month and start slashing. It does not matter how small, even the buck you spend at the coffee machine helps and adds up.
No one is happy to be bankrupt; sometimes it is the only option. Now that you have read this article, you have been exposed to some ideas, insights and advice from those who have gone down this road before. You will find that every journey in life goes more smoothly if you heed the advice of those who go before you, and this one is no different.
