Given the struggles in today's economy, it is understandable if you do not wish to burden friends and family with your financial problems. When you are barely making ends meet and unable to pay certain bills to satisfy others, there comes a sense of shame that you would rather not expose. Filing for personal bankruptcy may become an option, but know that doing so doesn't necessarily mean failure. People come to this point through different circumstances, and it's important to know the rules of personal bankruptcy before you proceed.
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If you have never filed before, you may wish to call on the counsel of a reputable bankruptcy lawyer who will help you through the process and explain the language of bankruptcy. You may already be familiar with a few terms, but here are some things to note as you prepare to meet with a firm or bank:
1) Know what types of bankruptcy are available to you. You may qualify for Chapter 7, which forgives your debts but would require you to give up some of your more valuable assets like your home, car, or other items to take care of some payments. There is also Chapter 13, which allows you to keep your home but you are placed on a strict payment scheduled until your debts are paid. In both cases, the mark will show on your credit report for 7-10 years.
2) Which one is best for you? A bankruptcy attorney will advise you with regards to the program you need, but it's good to read up on both so you know what to expect. In the case of Chapter 7, your financial slate is essentially cleared, and you may be recommended to go this route if you have no large assets to speak of, like a house or boat or truck. Rules for Chapter 7 may vary according to your state of residence, too.
3) Credit counseling is mandatory. As part of your filing process, you will be required to go through financial counseling to determine the best course of action. Certification of counseling is included when you file, if you file. During the course of counsel, a financial expert may find another option for you that allows you to keep your personal assets while relieving your debts.
4) Not all debts can be forgiven. Bankruptcy isn't a free pass - action is required on your part, and not all of your debts qualify. Student loans, alimony, and dependent support are just some of the types of payments that may not fall under this umbrella.
5) It is possible to rebuild good credit. Bankruptcy need not be viewed as the end, but rather the opportunity for a fresh start. While it's true your credit scores will be affected for some time, you can rebuild a good standing financially. Speak with a financial expert on the best steps to take, which could vary from obtaining new credits cards or exhibiting on-time payment of purchases for an extended period.
Personal bankruptcy may seem like a low point in your life, but if you know what to do you can recover in good time and work toward a prosperous future.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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