Keeping Your Head Above Water When Bankruptcy Is The Option

Frustration, fear, sadness and anger are among the emotions you may go through as you deal with a personal bankruptcy. They are very worried about paying bills and living day-to-day. Bankruptcy should be looked at as a way to move forward, and get things back on the right financial track again. This article will help you understand how.

Filing for bankruptcy is something many people are forced to do when there debts become too much of a burden, and they can no longer afford to pay them. If you have unmanageable debt, you need to familiarize yourself with regional bankruptcy laws. Bankruptcy laws vary from state to state so it is important to do your research. For instance, your home might be protected in some states while you might lose it in others. Before filing for personal bankruptcy, be certain that you are familiar with the laws.

When you document your financial records, it is vital that you are 100% truthful in order to have a successful resolution to your bankruptcy process. You might feel tempted to not declare certain assets in your bankruptcy in order to protect them from forfeiture, but if you’re found out, the process could take longer, or worse, you might be banned from filing for bankruptcy completely.

Consider Chapter 13 bankruptcy. With a consistent income source and less than $250k in debt, try filing for Chapter 13. This lets you keep any real estate and personal property while you repay all your debts through a consolidation program. Typically, any plan you develop will last around 3-5 years. Afterwards, any remaining unsecured debts will be discharged. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.

There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. Under Chapter 7 type bankruptcy, all debts are forgiven. You will no longer be liable for any money that you owe to your creditors. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.

As was stated before, the option of filing for personal bankruptcy should be kept open. But, you need to look at all of your options rather than jumping into bankruptcy head first. Bankruptcy has negative ramifications that can effect you for awhile. Knowledge is power when it comes to bankruptcy.