Filing for bankruptcy is not an easy decision. Of course, the consequences of filing bankruptcy make it a decision that should be entered into with a great deal of thought and consideration. Before you decide that this is the only solution for you, take some things into consideration first.
A bankruptcy will stay on your credit report for a full ten years. This means that during that time, you will find it very hard to obtain credit or a loan for anything while the bankruptcy remains on your credit report. It can be difficult to predict your need for credit in the future, but you should understand that you will be facing a much harder road than others when it comes to finding financing for anything in your future years.
There are different types of bankruptcy that you can file for when you file a bankruptcy. Most people file a chapter seven bankruptcy which will liquidate your assets and use them to pay off part of the debt. A chapter thirteen bankruptcy is used to set up a repayment plan that will allow you a longer period of time to pay off the debt that you owe. There are tests to determine which type of bankruptcy you qualify for. There are some people who end up filing a chapter thirteen bankruptcy because they are unable to pass the qualifying test to file a chapter seven.
You should obtain legal advice before you file your bankruptcy. It is possible for you to do it on your own, but it is not recommended. Your lawyer will help you find all of the options that are available to you when you are considering a bankruptcy filing. If you are in dire circumstances and cannot afford an attorney, you might qualify for free legal advice.
You will be required to obtain credit counseling when you file for bankruptcy. The government must approve the credit counseling that you use and you will have to obtain credit counseling one hundred and eighty days before you file. The counseling company that you use will give you a certificate when you file that you will need when you file for your bankruptcy.
It is important that you explore all of your options before you file for a bankruptcy. The credit counseling that you obtain may just help you find your way out from under your debt without a bankruptcy. This is the ideal situation. While late payments and missed payments are not good on your credit report, a bankruptcy is far worse. Try to negotiate with your creditors to find a repayment plan that will work without the need for bankruptcy court.
If you are unable to negotiate with your creditors, a counselor is often able to work out a deal for you. These counselors are trained at negotiating with creditors and may be able to get you a better deal than you would find on your own. Take advantage of the requirement to obtain credit counseling as your last effort to work on your debt on your own. Bankruptcy should only be used when there is no other choice at all and all options have been explored.
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