It is very upsetting to be completely overwhelmed by debt. In severe cases, a small amount of debt can become overwhelming in a relatively short period of time. Unfortunately, this problem is difficult to fix, once you realize you have it. The article you are about to read will give you advice on dealing with your debts through bankruptcy. money lender
Lots of people have to claim bankruptcy when their bills are larger than their income. If this sounds familiar, you should read up on the bankruptcy laws in your state. Each state has their own bankruptcy laws. Your house is safe in certain states; however, in other states, it isn't. Know what the laws are in your state before filing.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it's best if you can find one through the personal recommendation of a friend, family member or acquaintance. There are plenty of companies who know how to take advantage of people who seem desperate, and it's important to be sure your bankruptcy can go smoothly; take your time and choose someone you can trust.
Investigate any new laws before deciding to file a bankruptcy. Bankruptcy law has changed substantially in recent years, and therefore you must understand how such changes may affect your situation. To stay up-to-date on these laws, check out your state's government website.
Safeguard your home. Filing for bankruptcy will not always result in losing your home. Depending on whether the value of your home has decreased or if you have a second mortgage on the home, you may end up keeping it. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. 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. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
Make time to visit with family and friends during the bankruptcy process. The process of bankruptcy can prove particularly brutal. It is lengthy, stressful and often leaves people feeling ashamed, unworthy and guilty. Some people do not even want to speak with others until the bankruptcy is official. However, this isolation will just make you feel worse, and it could cause you to be depressed. Remember that it is not your families fault for your financial hardships and use this time to pull together and be strong.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. All debt will be eliminated with Chapter 7. Your responsibilities to your creditors will be satisfied. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. Both options have advantages and drawbacks, so do your research before deciding.
After reading this article, hopefully you now know that bankruptcy does not have to mean doom and gloom. Though it is very difficult, personal bankruptcy is not the end. Implement the advice from this article, and be on your way to your fresh start.