Never take huge cash advances directly from your credit cards before you file for bankruptcy, since you know that all debts will be erased from these cards. Doing so, is a type of fraud that may result in your having to pay back all money advanced from credit card accounts in the months just prior to your bankruptcy.
Research the rules and regulations of personal bankruptcy before you file. The bankruptcy code contains several provisions that can raise serious obstacles in your case. You might find that your case become dismissed because of a mistake. Make sure you check into your case and see that you have the paperwork filled out correctly. Doing so will make the process a lot easier.
If, after you file a Chapter 7 petition, you learn that the homestead exemption does not apply, it might be possible to convert your case to a Chapter 13. There are some times when your best option will be to change your case from a Chapter 7 filing to a Chapter 13 filing. Consult your attorney to see if this option is right for you.
Before declaring bankruptcy, see if there's anything less drastic you can do to repair your credit. Ask a bankruptcy lawyer if a debt repayment plan or rate reduction would be of benefit. You can apply for a modification of your mortgage if your home is going into foreclosure. A good lender will be able to assist you in a variety of ways, from getting rid of your late charges to reducing interest rates. You may even be able to get a loan extension, giving you the extra time you need to pay your debt off. Most creditors will be willing to work out an option to avoid not getting paid at all.
Do some research to find out more about Chapter 13 and Chapter 7. Chapter 7 eliminates all debts. Your former ties with creditors will cease to exist. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. When choosing the type of personal bankruptcy that is correct for you, it is very important that you know the differences.
Prior to declaring bankruptcy you really need to be sure that you've exhausted all your other options first. If your debt is relatively low, you may be able to manage it with credit counseling. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
If student loans comprise a major portion of your debt, filing for bankruptcy may prove difficult. Although regulations vary from state to state, in most areas, student loan debt is one of the hardest types to get discharged. You have to prove undue or extreme hardship to get those loans discharged.
Don't isolate yourself from family and friends. The bankruptcy process can be brutal. It takes time and a lot of people feel stressed and ashamed throughout this procedure. A lot of people become depressed and withdrawn until their bankruptcy is discharged. Washing yourself in self-pity will only make the situation worse and can leave you feeling very depressed. Make it a point to catch yourself if you feel yourself pulling away from others. Tell others that you would like to do some enjoyable things together while you go through bankruptcy process, then do it.
Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. The laws change a lot, so you need to look them up and have a better idea of how to properly approach the bankruptcy process. Check the website of your state's legislation or get in contact with your local office to learn more about these important changes.
Now you can see why bankruptcy may be a good option for you. That said, you should think twice before filing, since it leaves a huge black mark on your credit. Don't sit back and let the process take control of you. Take control of the process by doing your research so that you don't lose more than you need to.