It is really scary to be way over your head in debt. In severe cases, a small amount of debt can become overwhelming in a relatively short period of time. Unfortunately, it's not easy to fix them when that happens. You might consider bankruptcy, look through this article and find out why.
Straight from the source
You should check with the personal bankruptcy resources available online to educate yourself thoroughly before you begin the process. The United States Department of Justice, NACBA, and American Bankruptcy Institute websites are all great places to go for up-to-date information. Knowing as much as possible about bankruptcy gives you an advantage and will help you make the best decision possible.
Do not hesitate to remind your lawyer of any details regarding your case. Inaccurate or incomplete information can lead to your petition being denied. It is in your best interest to speak out. You are in control of the outcome of your bankruptcy.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. Retirement funds should be avoided at all costs. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
Prior to declaring bankruptcy you really need to be sure that you've exhausted all your other options first. If you owe small amounts of money, you can join a counseling program or straighten your finances out by yourself. You could even negotiate for lower payments. However, you should ensure that you always obtain a written record of all the changes to your debt that you've agreed to.
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. The Chapter 7 variety can help you eliminate your debts almost entirely. All of your financial ties to the people you owe money to will disappear. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. It is vital that you know the differences between these types of bankruptcies, in order to find the option that's best for you.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Spend time researching the advantages and disadvantages of filing for each one of these. Ask your bankruptcy lawyer to clarify anything you don't understand before making a final decision about which type of bankruptcy to file.
Consider all of your options before filing for bankruptcy. One good option might be credit counseling. There are even non-profit companies that may be able to help you. With their assistance, you can reduce the payments you have to make and even get some of the interest removed from your debts. You pay the organization, and they pay creditors for you.
In conclusion, the option of bankruptcy is always there. Nonetheless, you should remember the negative impact filing for bankruptcy will have on your credit rating. For this reason, filing for personal bankruptcy should be your last resort. Arming yourself with knowledge is a good way to protect assets and approach the process wisely.