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Navigate Financial Difficulties With These Personal Bankruptcy Tips

Jul 16

Navigate Financial Difficulties With These Personal Bankruptcy Tips

Making the choice to file for personal bankruptcy is something that many find difficult, if not excruciating. But, armed with the right knowledge and information, it is possible to view the process as the best way to achieve a needed fresh start in your personal finance, and not something that must be dreaded. Put the tips in this article to work today and gain new perspective on what bankruptcy can do for you.

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One you realize you are in financial trouble and have decided to file for personal bankruptcy you should move quickly. Waiting to the last minute to file bankruptcy can cause a number of issues. You may face negative repercussions such as wage or bank account garnishment or foreclosure on your home. You can also not leave time enough for a thorough review of your financial situation, which will limit your available options.

 

Brush up on the latest bankruptcy regulations before you decide whether or not to file. The laws change a lot, so you need to look them up and have a better idea of how to properly approach the bankruptcy process. To stay up-to-date on these laws, check out your state's government website.

 

Know the difference between Chapters 7 and 13 bankruptcies. Chapter 7 will wipe your debts clean, meaning you will not owe what you file against. Chapter 13 requires you to agree to repay your debts. These debts need to be repaid within three to five years of the filing date.

 

Don't wait too long to file bankruptcy if, you have to go that route. Many debtors spend years trying to deal with debt before they file. You can get free consultations with some attorneys, to find out about bankruptcy and your rights. They can suggest the best time to file, and may provide services like credit management.

 

Keep in mind that, currently, student loans cannot be discharged when filing for bankruptcy. There is a process by which student loans could be considered dischargeable, but it is costly, difficult, and rarely successful. However, student loans in bankruptcy have been a topic discussed by Congress in recent years, so keep up with new bankruptcy laws to find out if any changes have been made.

 

Do not make the mistake of running up lots of new debt just prior to filing for bankruptcy. The court will take all of your spending into account, including recent debts you've incurred, and the judge may not be willing to waive debts if it appears that you are trying to game the system. Make sure that your spending habits reflect a true desire to change.

 

It is certainly true that the prospect of bankruptcy is a topic feared by many. Much of the worry and hesitation surrounding the filing personal bankruptcy stems from insufficient knowledge on the part of consumers. By studying the guidance and advice in the piece that follows, it is possible to better understand what bankruptcy means and does for debtors, and how best to optimize the process.