Bankruptcy: Everything You Need To Know Before You File

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Finding information about filing personal bankruptcy does not have to be difficult. There are things to do and things to avoid doing just before and following filing bankruptcy. The following article is full of information that may help you know what to do and what not to do around the time of filing bankruptcy.

Keep your debts to a minimum prior to filing. If you are planning on filing for bankruptcy, don’t run up your debts. Your recent history will be checked by judges and creditors, and if it is deemed that you are trying to cheat the system, you may not be able to wipe out those debts. You will be viewed most favorably, if you can demonstrate that you have changed your spending habits.

Make a detailed list. Every creditor and debt should be listed on your application. Even if your credit cards do not carry a balance at all, it should still be included. Loans for cars or recreational vehicles should also be included on your application. Full disclosure is imperative during this part of the bankruptcy process.

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. The Chapter 7 variety can help you eliminate your debts almost entirely. This type of bankruptcy ends any relationship you might have with creditors. A Chapter 13 filing involves a repayment plan, though. Typically, you will make a partial payment against your debts over the next 60 months before the balance of the debts is lifted. Take the time to learn more about these different options so you can make the best decision possible.

Once you have filed for bankruptcy, do not discontinue payment on secured loans. These loans are the ones for your car or your home. Even if you are not receiving paper bills or statements on these accounts, make the regular payment on time, each month. These are likely the possessions you do not want included from the bankruptcy.

If you are considering filing for personal bankruptcy, be certain that this is really the right course of action for you. You may well be able to regain control over your debts by consolidating them. It can be quite stressful to undergo the lengthy process of filing for personal bankruptcy. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. You only want to file for bankruptcy after you have exhausted your other options for dealing with your debts.

Before declaring bankruptcy, see if there’s anything less drastic you can do to repair your credit. Consult with a bankruptcy attorney to see if an interest rate reduction or debt repayment plan is an alternative to filing for bankruptcy. A plan that can be useful when foreclosure is looming is a loan modification. Your lender can adjust your loan in many ways including extending the time you have to pay, reducing your interest rate, or canceling some of your late fees. When push comes to shove, creditors want their money, and they are willing to make concessions to get it and prevent the debtor from declaring bankruptcy.

You should now be better prepared for the time before, during and after bankruptcy. The information that has been provided to you has been known to help many other debtors in the same situation that you are in. Use it to your benefit and make the right choices with such a big life choice.