Bankruptcy: What You Need To Know

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Bankruptcy: What You Need To Know

Bankruptcy: What You Need To Know

If you have considered filing for bankruptcy, you are probably stressed out and upset. It can be hard to figure out what to do and what steps you should take. Here are some smart tips that you can use to guide you through this difficult time and take the actions that are right for you.

As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. Don’t touch retirement accounts unless you don’t have a choice. Although you may need to tap into your savings, you should not use up all of it right now and jeopardize the financial security of your future.

Before resorting to bankruptcy, contact your creditors in a good-faith effort to renegotiate your payment terms, or interest rate. If you get in touch with them early enough, they may be willing to waive fees or negotiate a new payment schedule. If they are it means they are more likely to receive the money that you owe.

You must be entirely candid when it comes to declaring assets and obligations in your bankruptcy petition. The person you choose to file with needs to know both the good and bad aspects of your finances. Do not leave anything out and come up with smart plan to manage the situation you are dealing with.

Know what debts can be forgiven. You may hear that you have to pay a certain debt, and that it cannot be discharged, but that information will usually be coming from a bill collector. Student loans and child support and a few other debts cannot be discharged, but most others can.

Be sure to consider all of your options before filing for personal bankruptcy, as there may be some you haven’t considered. If you have a job that has slowed down due to the recession, such as construction, you may need to find a new job. This could help your situation until the economy picks back up.

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 planning to file for bankruptcy, be certain not to transfer any of your belongings or valuables to another person. This includes taking your name off of joint bank accounts or other financial assets. The court will be looking for anything of value in order to repay creditors, and you will be asked under oath whether you have left anything out. If you do not tell the truth, you may be charged with perjury and could possibly spend time in jail. Remember, honesty is the best policy.

Spending time with the people you love is something you should do now. Bankruptcy can really wear down your emotional reserves. It’s generally stressful, lengthy and can make people feel guilty, ashamed, and unworthy. There are a number of people who wish to go into seclusion while undergoing the process of personal bankruptcy. Do not isolate yourself or you will put yourself at risk for depression. Time spent with people who care about you can give you new perspective on your financial situation.

Now that you have read this article, you know that there are things you can do to ensure your financial well-being, even if you should choose to file for bankruptcy. Bankruptcy can be stressful and upsetting, but now that you have the information to make smart decisions about your actions, you can start to rebuild your financial life.

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