The financial sector has recently reached its boiling point, resulting in stricter lending practices by banks and other financial institutions. Making matters worse, these stricter standards have been put into place regardless of the borrower’s credit record. Consequently, the decision to claim bankruptcy has become increasingly common for those looking to eliminate unsecured debt, or for those looking to get out from under mortgages that they can no longer pay. Some people face the difficult reality of a depressed home valuation or an out of control adjustable mortgage, which has made bankruptcy protection seem like a worthwhile option. Of course, as the number of people eligible for bankruptcy protection increases, so does the confusion regarding how to claim bankruptcy and even whether or not bankruptcy is the right path.
Not surprisingly, the number of bankruptcy claim incidents has continued to increase over the past couple of years as the United States has officially entered into a financial recession. As home foreclosures and unemployment continue to soar, people are being forced to take a hard, honest look at their finances, and the picture isn’t always rosy. The people that took a gamble on the acquisition of risky adjustable rate mortgages a few years back are some of the same people that now find themselves in need of expert financial advice in order to clear themselves of toxic debt. If you think you might be a candidate for claiming bankruptcy, there are several things you should consider before initiating the process. One of the worst things you can do is to delve into the initiation phase without doing the proper planning. Although some people caution against bankruptcy planning for legal reasons, taking the time to get everything in order before filing bankruptcy is perfectly legal and is the smart thing to do.
When planning to file, there are 3 pieces of information that you’ll need to have squared away – your debts, assets and current household income. Don’t be too concerned with funds associated with your retirement, as these are often exempted through court proceedings. With that said, however, it’s important to avoid large withdrawals from your retirement accounts prior to the filing procedure, as this can affect your eligibility to file. If you happen to be a home owner and there is a lot of equity in your home, you will either be required to sell your home or will be forced into Chapter 13 protection, which means that you will be given a planned payment period of 3 to 5 years. The plan will be percentage based, relative to the debt owed. It’s critical that the information you gather be as accurate and complete as possible, as the difference between your assets and debt will be the deciding factor for the type of filing that you quality for. If given a choice, you will likely want to file Chapter 7 protection, which will allow you to keep your property and eliminate the majority of your debt.
Ultimately, it’s important for you to gather as much knowledge as possible before filing for bankruptcy protection. Searching through forums that deal specifically with bankruptcy is a great way to get a feel for what the process will be like, and can provide you with knowledge that you might not otherwise be privy to. It can also help to secure the services of a bankruptcy service company. As always, it’s critical that you retain an experienced and well regarded bankruptcy attorney prior to filing. After all, you don’t have to go it alone.
Click on the following link to learn the answer to the question “Can a spouse file bankruptcy alone?”
Want to know how to find bankruptcy filings? We have the information you’re looking for.