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Understanding Why Bankruptcy Is Not The End Of The World


Bankruptcy is a hard decision, but sometimes a necessary one. If you are thinking about filing for bankruptcy, it’s best to be armed with as much information as possible. Keep reading for tips and advice from those with personal bankruptcy experience.

Be sure you know how Chapter 7 and Chapter 13 differ. All debt will be eliminated with Chapter 7. All happenings with creditors will disappear. A Chapter 13 filing involves a repayment plan, though. Typically, you will make a partial payment against your debts over the next 60 months before the balance of the debts is lifted. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.

Don’t leave all the details in your lawyer’s hands. The complexities of bankruptcy law will be familiar to your lawyer. However, you will be better able to work for your own advantages if you have some basic understanding of what is happening. You may think about your lawyer taking care of everything, but it’s important to keep in mind that it’s your life at stake financially.

When hiring an attorney, make sure he has bankruptcy experience. There are a lot of lawyers that you can pick from. While you may think that you should hire the least expensive attorney, experience is the most important criteria regardless of the attorney’s billing rate, so check their background and previous cases.

Don’t file for bankruptcy unless it’s absolutely necessary. You may be able to get away with going through debt consolidation to help make the payments easier to deal with. Filling for bankruptcy is a lengthy, stressful process. It will have a major effect on your credit as time goes on. So, consider bankruptcy only as a last resort when you have no other choice.

Before going through the Chapter 7 filing process, ensure that your co-debtors are abreast of any implications relating to this process. When filing for Chapter 7, you won’t be responsible legally for debt signed by co-debtors and yourself. But, creditors will ask for the money from your co-debtor.

As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. You should always keep money saved for worse times. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.

One common contributing factor for bankruptcy is the financial consequences of filing for divorce, so make sure to consider your plans carefully. The economic stress of a divorce can be the final blow leading to bankruptcy and this situation may be avoided. A great way to avoid this is by not getting divorced.

When you’re thinking of filing personal bankruptcy, you have to be sure you know what steps led you to that decision. Some people’s personal bankruptcy is caused by sudden emergency medical bills. Others are bankrupted by an addiction to shopping and spending gone wild. Clearly, these are two very different situations. If you have a hard time controlling yourself when it comes to spending money on unnecessary things, you might want to ask for help in order for you not to go back to experiencing financial trouble once you finish filing for bankruptcy.

Sometimes declaring bankruptcy is simply the only viable option, even though it’s one that nobody wants to take. Having read the preceding piece, you now possess critical insight and knowledge offered by those with actual prior bankruptcy experience. 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.