If some significant overspending got you into deep financial trouble and there's no way to negotiate your way out, it's time to consider the bankruptcy option. Once you've run out of other options, bankruptcy can give you the fresh start you desperately need, especially if you're ever going to rebuild your credit again. However, filing for bankruptcy does take some careful planning. Here are four steps that will help you navigate the process.
It is not unusual in this life to fall into financial hardship. But before you file for bankruptcy, it's important to arm yourself with facts so that you know what you are getting into.
When you file for bankruptcy, your property is handed over to a bankruptcy trustee who handles your assets on behalf of your creditors.
What happens then? Do you lose all your property or do you get to keep part of it?
Facing foreclosure is stressful enough, but depending on the state you live in, you may not even get a date in court in order to defend yourself. This is possible in states that allow for a non-judicial foreclosure, which is over half of the states in the country. But it's not just the type of foreclosure favored and allowed in the state, but also what's written in the mortgage paperwork you signed when purchasing the home.
Considering bankruptcy is an option you have if you are struggling with so much debt you do not know where to turn, and visiting with a bankruptcy lawyer is a great way to learn more about the process. When you visit with an attorney, you will not be obligated to file for bankruptcy, which is good to know, but it will help you understand whether it is the right option for you.
When you file for bankruptcy, you give the Federal bankruptcy courts authorization to look at every aspect of your financial records, including bank accounts, credit accounts, and property you own. Once the courts are satisfied that everything is in order and your creditors have received adequate time to request payment, your bankruptcy will be discharged. When that happens, your debts will either be forgiven or you'll enter into repayment status, depending on which chapter you filed under.