Can Personal Bankruptcy Help My Financial Situation?
Filing for personal bankruptcy may seem like the best way to deal with a mountain of debt. However, if the debt is due to uncontrolled spending, the problem will not go away, just because of a bankruptcy filing. Continue reading for some insights on personal bankruptcy to help educate yourself on what this legal tool can and cannot do.
A critical tip for anyone considering a personal bankruptcy filing, is to make sure not to wait too long to seek relief. Delaying a bankruptcy filing can result in potentially devastating events , including home foreclosure, wage garnishments, and bank levies. By making a timely decision to file, it is possible to maximize your future financial options. Getting a clean start faster than you may have thought possible.
A huge mistake people make before filing for bankruptcy is maxing out their credit cards. This can lead to disaster when you file and the credit card companies might not discharge the debt. If you can, you need to stop using your credit cards at least six months before you file, and ideally for a year prior. Also, do your best to pay the minimum payments on these cards for at least six months before you file.
A useful tip for those thinking about filing for personal bankruptcy is, to keep in mind that any damage to your credit history caused by the filing is temporary. While there is no doubt that your score will take a noticeable hit, following your bankruptcy discharge, by using the process to start fresh. You have the ability to put yourself on a stronger financial footing going forward. This will allow you to rebuild your credit score faster than you may expect.
Watch your lawyer fill out your paperwork carefully. They, most likely, have multiple cases going on at the same time and may not be able to keep up with every detail of your case. Be sure to carefully read all of that paperwork, in order to make sure that everything is filled out correctly.
As tempting as it may be, do not run up credit cards right before filing for bankruptcy. Many times, people purchase expensive items, like jewelry, appliances and furniture right before they know they are going to file for bankruptcy. Most of the time, they are still going to be responsible for paying back this debt.
Before meeting with a lawyer, start compiling all of the documentation and paperwork you will need to provide an accurate picture of your finances. Gather six months’ worth of pay stubs, bank statements, bills and credit card statements. Create a list of property and assets that you own. Having this entire information ready from the beginning can save you trouble when it’s time to file.
Educate yourself about the bankruptcy process. You can increase your knowledge of the bankruptcy process by conversing with a bankruptcy attorney or by carrying out independent research on the internet. Whichever method you chose to increase your knowledge of the bankruptcy process, it is vital that you comprehend how filing for bankruptcy will affect yourself, your family and your creditors.
Evaluate your consultation with any lawyer by the way he or she handled the consult. Consider the length of your consult. If it lasted less than 15 minutes or it was with an assistant rather than an actual lawyer conducting the consult, this could signal that lawyer is probably not the best choice. You want someone that takes the time to handle your case personally, and you want to get your money’s worth. You should also shy away from those lawyers who pressure you with phone calls or try convincing you immediately after a consultation by getting pushy.
Include all financial information when filing for bankruptcy. Things that may not seem significant to you may be very important. Include all assets like: vehicles, every cent of income, retirement account, stocks and anything else that has value. Furthermore, include any lawsuits that are pending against you or other parties.
Be fully educated about the rules of bankruptcy. If the courts were to find that you have disregarded any of the rules in place, your petition could be dismissed. Laws prohibit picking and choosing some debts to pay off prior to filing for bankruptcy. Family members cannot be paid off within one year of filing and creditors are limited to ninety days.
Before you make a final decision to file for bankruptcy, look into all the options that are available to help your financial situation. If you are buried under credit card debt, it can help to check out a debt-consolidation, or home-equity loan if you qualify. You can also try negotiating smaller payments on your debt until, your finances are better in control. Bankruptcy is always an option, but if you can alleviate your problems in another way, you will be able to avoid a major hit to your credit history.
As you can probably see, personal bankruptcy is not a magic pill that makes all of your debts just vanish. However, in certain situations, it is a viable option. Managing your finances takes discipline and a certain amount of financial knowledge. Hopefully, this article has shed some light on personal bankruptcy, and whether it makes sense for you.