Advice On And Options For Declaring Personal Bankruptcy

Personal bankruptcy is always an option for those who have had possessions, such as vehicles, repossessed by the Internal Revenue Service. Bankruptcy totally destroys your credit, but in many cases, people have no choice but to file. The article below discusses some of the pros and cons of filing bankruptcy.

 

If you are planning to file for bankruptcy, you do not need to lose your home, car or other items that you have loans for. If you wish to keep them, however, you must make the payments on a timely basis in order to avoid repossession. If the payments are too much to handle, your bankruptcy attorney may be able to arrange for an evaluation of your loan and negotiate a lower monthly payment. In the case of a home, you may look into a loan modification or refinance to reduce your payment amount.

 

Before you consider filing for bankruptcy, you should make a pre-determination if bankruptcy may be the right choice. First, make a list of all income, including, salary, child support, alimony, rent and any other sources you may have. Then, make a list of your bills. These would include mortgage, rent, car payments, monthly credit card payments, groceries and gas. If your monthly bill total is more than the income you bring in, it may be time to seek the advice of a bankruptcy attorney, who can help you make the final decision. For more detailed advice, contact a bankruptcy attorney.

 

If you are planning on filing for chapter 11 bankruptcy, it is important that you hire a lawyer. Working with a lawyer is necessary, because filing for chapter 11 bankruptcy is much, much, more complex than filing for other bankruptcies. A lawyer will make sure that your rights are protected. He can guide you through the bankruptcy process, providing valuable advice.

 

If you have filed for Chapter 13 bankruptcy, but realize that you are unable to meet your payment obligations, you may be able to convert to a Chapter 7 bankruptcy instead. To qualify for the conversion, you must never have converted your bankruptcy before and also undergo a financial evaluation. The laws surrounding this process are always changing, so be sure to talk with an attorney who can help you navigate this process.

 

There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. Chapter 7 is the best option to erase your debts for good. 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. It is vital that you know the differences between these types of bankruptcies, in order to find the option that’s best for you.

 

Many times, when a debtor files for Chapter 7 bankruptcy, their home can be protected. This is because of the homestead exemption. This exemption can protect the home, if the debtor owes below a certain threshold. Laws concerning this exemption do vary between states. Be sure to consult with a bankruptcy attorney before, assuming your home is safe from liquidation.

 

Do your research before choosing a bankruptcy lawyer. Take advantage of free consultations, and meet with several different lawyers before picking one to work with. Make sure that you choose an experienced attorney who is knowledgeable about the local laws, the preferences of trustees, and has a good working relationship with local judges.

 

Before deciding to file for bankruptcy, you may want to look into other options. Remember, when you file for bankruptcy, you are greatly hurting your credit score, which in turn, can prohibit you from buying a house, car, and other big purchases. Consider safer, alternative methods first, such as consumer credit counseling.

 

Now you can see why bankruptcy may be a good option for you. Of course, it may not be best for all situations and can even make your credit matters worse. Knowledge is power when it comes to bankruptcy.

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