Thinking About Bankruptcy? Below Are Key Factors You Should Know Before Filing

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If you have problems paying your debts, threatened with garnishment, repossession or foreclosure, you can consider filing bankruptcy as a way of solving these challenges. Under federal law, you have the right to file bankruptcy and have a fresh financial beginning. Bankruptcy can be much helpful and effective when solving financial problems in certain conditions. However, it may not be the answer to entire financial problems or appropriate way for everyone. More so, there is need to choose proper time to file the same. For instance, it is good to wait until there is a great need to file since you can only apply for bankruptcy once in every six years.

 

In most situations, you may prefer to save this valuable alternative until when it is really necessary. On the other hand, you should not consider filing bankruptcy because creditors are just pressuring you. More so, you cannot be jailed if you lack to pay civil debts apart from court ordered amounts or fines. You can determine whether filing a bankruptcy is appropriate by discussing the matter with a lawyer who is conversant with the same since cases differ and laws keep changing.

Some Things Bankruptcy Course Can Do:

  • Get rid of legal requirement to pay most or your entire debts. This is referred as “discharge” of debts;
  • Prevent foreclosure for your home and permit you to cater for missed payments;
  • Prevent repossession of vehicle or other property or within some conditions order the creditor to return your property;
  • Prevent wage garnishments;
  • Prevent harassment of debt collection;
  • Prevent termination or restore utility service for non-payment of former bills. You may have to pay some deposit of specific amount;
  • Recover your driving license in case it has been suspended after failing to pay court-ordered damages after accident (unless you drive under the influence of alcohol or drugs);

Some Things Bankruptcy Cannot Do

  • Get rid of particular rights of secured creditors. Examples of secured debts are home mortgages and car loans;
  • Free debts that occurred after filing bankruptcy;
  • Free particular types of debts like child support, alimony or spousal maintenance, debts associated with divorce, court restitution orders, most student loans, most taxes and criminal fines;
  • Exempt obligation of co-signer for your loan in most cases.

To start afresh, you need to get educated. The first thing you are supposed to do is to finish a pre discharge bankruptcy course as required by law. As you prepare for a new beginning, the more you study about managing your funds and building good credit, the more victorious you become in life. Attending a bankruptcy education class prepares you in below four main areas:

  • Setting practical financial goals;
  • Comprehending your credit report;
  • Re-establishing or obtaining credit;
  • Managing budgets.

A pre discharge bankruptcy course will cover several financial and budgeting areas making sure you get the necessary tools to establish a strong financial background. During the course, you get tools and tips for wise funds management and credit utilization. More so, you know how to set manageable financial objectives, form a livable budget, calculate your net worth and build a savings strategy. Additionally, your course facilitator shares with you how to get credit reports, dispute errors, re-establish or establish credit, and secure yourself from identity theft.

A Procedure for Filing a Bankruptcy

1. Evaluate All Your Options

Bankruptcy may not necessarily give you a fresh start in some conditions. For instance, some debts like child support or mortgage may not be relieved. More so, bankruptcy stays in your credit record to a minimum of ten years and this can force r creditors to stop performing any business with you.

2. Know the Proper Time to Choose Bankruptcy

In some circumstances, filing a bankruptcy becomes the only viable alternative left. Filing it will immediately lead to “automatic stay” which stops creditors from seizing your property. However, you need to consider it when you are in some of below condition:

  • When you are unemployed and you have used your savings;
  • You wages are almost garnished or your home is near foreclosure;
  • You have unpaid back taxes;
  • You are sued for unpaid debts.

3. Hire a Lawyer

If bankruptcy is the best option, you need to hire a lawyer who specializes in bankruptcy to assist through the complicated filing progress. Any misstep like filing the wrong paperwork can make your case to fail.

4. Confirm the Cost of Filing Bankruptcy

The process fees will include lawyer’s fee apart from those receiving court filing fees and free legal services.