Thursday, June 26, 2014

Solid Advice When Dealing With Bankruptcy Problems

By July Ann Dizon


If you are faced with the threat of repossession of valuable assets, you may become terrified of the IRS. Stop the calls from your creditors, and look over your finances. You may discover that you need to file for bankruptcy. Read on to see how to get through the process.

Be certain you are making the right choice before you file for bankruptcy. You can also avail yourself of other options, such as consumer credit counseling. Bankruptcy stays on your credit for a whole decade, so if there are less drastic options that will solve your credit problems, it is in your best interest to make use of them.

Do not use your retirement fund or savings to pay off creditors. Leave your retirement accounts untouched unless there is absolutely no other alternative. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.

Don't be afraid to remind your attorney of certain details in your case. Never assume that they can remember all details without reminders. Remember that you're the boss. You're paying your lawyer, so you should not be afraid to have your say. After all, the quality of your life hangs in the balance.

If you are about to file for bankruptcy, then make sure you hire a lawyer. Bankruptcy can be highly confusing and stressful, and you need an unbiased partner who can help simplify the process. A lawyer that specializes in bankruptcy can make sure you are following the correct procedures in your filing.

Know the differences between Chapter 7 and Chapter 13 bankruptcy. Should you choose Chapter 7, your total debt load will be erased. You will no longer be liable for any money that you owe to your creditors. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. It's important to know what differences come with every type of bankruptcy. This will let you find out what's best for you.

Before you file for personal bankruptcy, weigh all of your options. Talk to a bankruptcy lawyer to see if a debt repayment plan or reduction in interest rates is a viable option for you instead of bankruptcy. Look into loan modification plans if you need to deal with an imminent foreclosure. This type of plan allows your lender to work with you eliminating charges, extending your loan, and lowering interest rates to help you pay back the loan without drowning in debt. After all is said and done, your creditors will still want their money. For this reason, you may wish to investigate debt repayment programs in lieu of bankruptcy programs.

Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. Your former ties with creditors will cease to exist. In a Chapter 13, though, you'll be put on a payment plan for up to 60 months before being free of your debts. To make the wisest choice, you will need to understand the consequences of each of these two options.

Do not take too long deciding that it is time to declare bankruptcy. It's very difficult admitting you need help, but waiting too long can actually make it worse. Speaking with a professional in a timely manner will allow you to receive sound advice that can help you before things get out of hand.

Understand that in the long run, a bankruptcy filing may be better than continued missed payment when it comes to your credit score. Though it will still mar your credit history for up to 10 years, the damage can be improved. This is why people call bankruptcy a fresh start.

Write down every one of your debts. This will be your basis in filing for bankruptcy, so see to it that you write down all of the debts you're aware of. Remember to go through all of your records and try to determine the exact amount. Take your time during this process; don't rush and make sure all of your figures are correct.

Once the bankruptcy is a few months old, you should re-evaluate your credit with all three of the credit bureaus to confirm accuracy. Make sure that the report accurately represents your discharged debts and closed credit accounts. Address any mistakes or issues that you find so you can be on your way to better credit.

Filing bankruptcy should only be considered after the other options have been exhausted. Avoid debt consolidation services and credit counseling services that seem too good to be true. Keep these tips in mind to make the best choices for your financial future and to avoid worsening your debt.




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