What To Know Before You File For Bankruptcy

July 23, 2013

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If you have been put into the position of needing to file for bankruptcy, you are likely not to be very happy about it, but it does not lead to your life ending. Bankruptcy exists in order to provide you with a fresh start. Don’t look at it as the end of the world; read this article to help you determine how your life will be enhanced by bankruptcy.

TIP! Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Every one of your debts will be gone if you decide to go with Chapter 7.

When people owe more than what can pay, they have the option of filing for bankruptcy. If you’re in this situation, learn about the laws where you live. The laws governing bankruptcy vary from state to state. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. Be sure to have some familiarity with the law in your jurisdiction.

TIP! Take steps to ensure your home is protected. Bankruptcy filings don’t necessarily have to end in the loss of your home.

Once you file for bankruptcy, you will have a hard time getting loans or credits. If you do, then try applying for a coupe of secured cards. When you do this, it shows your determination to fix your credit history. Unsecured credit may be offered to you quicker than you think after doing so.

TIP! Filing for bankruptcy is not recommended when you have income more than your debts. 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.

Be completely honest whenever you file for personal bankruptcy. Hiding any asset or liability is a risk that will bite you in the end. Whoever provides your legal consultation must be privy to all of your financial information. Keeping secrets or trying to outsmart everyone is not a wise move.

TIP! Once you have completed the bankruptcy filing, you should take time to do something you enjoy. Bankruptcy is a stressful process: you will have to go over your bad financial decisions and perhaps feel ashamed about your decision.

As stated in the above article, anytime someone is forced into bankruptcy is never a happy situation. However, the story that gets written after bankruptcy does not have to be depressing too. Bankruptcy is not the end; by applying some or all of the tips in this article, you will make the process much smoother and your financial recovery that much faster.