Filing personal bankruptcy is a somewhat complex process. There are different types of bankruptcy, and the type that you choose depends upon your personal finances and the nature of your debts. The most important step you can take, of course, is to learn what you can about the process before ultimately deciding one way or the other. The following tips will help you understand bankruptcy.
Before you file for bankruptcy, find out which of your assets will be exempt from seizure. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. Make sure that you review this list before you decide to file, to see if you can hang on to your most important possessions. If you aren’t aware of this, you could lose some assets that you value.
Do not give up hope. 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 your property has been repossessed less than 90 days prior to your bankruptcy filing, there is a good chance you can get it back. Talk to your lawyer to find out how to go about properly filing a petition.
Avoid paying for a consultation with the bankruptcy attorney, but do ask many questions. Most attorneys offer free initial consultations, and you should take advantage of the chance to interview multiple practitioners. Only choose a lawyer if you feel like your questions were answered. Take your time choosing the right attorney to assist in your bankruptcy. Take your time, and schedule consultations with more than one lawyer.
Before you file, make sure you understand current bankruptcy laws. Bankruptcy laws are always changing, and you need to be aware of any changes so your bankruptcy can be properly filed. To stay up-to-date on these laws, check out your state’s government website.
Learn about teh differences between Chapter 13 and Chapter 7 bankruptcy. Take the time to find out about each one online, and look at the advantages and disadvantages of each. If something doesn’t make sense to you, go over it with your lawyer prior to choosing which one to file.
Avoid filing for bankruptcy if you make more money than your monthly bills. Understand that while declaring bankruptcy will eliminate many of your debts, you will have difficulty obtaining credit and will pay more in interest for the credit you do receive for at least seven years.
You should weigh every option before thinking about bankruptcy. Before filing, talk with an attorney who can help you weigh all of your options. If foreclosure looms, think about getting your loan plan modified. The lender is able to help you in a number of ways, such as reducing interest rates, eliminating late charges, and even lengthening the loan, giving you more time to pay. When all is said and done, creditors want their money and find repayment plans preferable to not getting paid at all.
Now you know why bankruptcy filing is a type of decision that needs to be carefully thought out before being pursued. If you decide bankruptcy is right for you, take the proper precautions. This could be a new beginning and a clean slate for you.