The path to bankruptcy is not normally a happy one, but your life can improve once the filing has occurred. The main purpose of filing is to start a new and improved financial situation. Keep reading to see how bankruptcy can actually give you a new lease on life, rather than function as a permanent financial albatross.
The two main kinds of bankruptcy are Chapter 7 and Chapter 13. Make sure you understand them so you know what is best for you. In Chapter 7 bankruptcy, your debts are all eliminated. With very few exceptions, the connections between you and your creditors will be severed. Bankruptcy under the rules of Chapter 13, on the other hand, require you to work out a payment arrangement to pay back the agreed upon amounts. Both options have advantages and drawbacks, so do your research before deciding.
No matter how messed up things are as you file for bankruptcy, it is important that you stay honest. The worst thing that you could do is to lie about your assets and debts. It’s also illegal. If you fail to declare certain assets or debts, you may be held criminally liable for the omission if it was found to be intentional.
Always be completely truthful when you disclose your personal information during a bankruptcy. If you are dishonest and try to keep things from the court, you can lose your chance to file altogether. Be certain that you disclose all of your income and all of your assets to the court. This shows the court that you are working to resolve the matter as quickly as possible.
It is important to look at your financial situation from all possible angles before you decide to file for bankruptcy. You might be able to address your debts by arranging a repayment plan or a reduction in your interest rates. Get professional advice on these matters from a bankruptcy lawyer. If a foreclosure is on your horizon, look into loan modification plans. These plans allow you a longer pay off period by extending the term of the loan, reducing the rate of interest or forgiving late fees. When all is said and done, creditors want their money and find repayment plans preferable to not getting paid at all.
If you file for a Chapter 7 type of bankruptcy, not all debts magically disappear so don’t have an expectation that they will. There are secured debts that must be reaffirmed, meaning you must draw up a new payment agreement. Other debts cannot be discharged at all. For example, you can’t discharge court-sanctioned fines, child support obligations or alimony payments via Chapter 7.
If you are unable to get a homestead exemption when filing for Chapter 7, you might consider filing for Chapter 13 bankruptcy to cover your mortgage. Sometimes, the best course of action may be to simply re-file your case as a Chapter 13 bankruptcy. Talk to your lawyer to determine if this is true in your case.
Learn from the mistakes you made that sent you to bankruptcy court. But, just because you ended up in this dark place does not mean that the sun cannot shine once more. Actually, your life can become much better by following the advice presented here and moving forward past bankruptcy