Caught Between A Rock And A Hard Place? 3 Things You Should Know About Bankruptcy

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You didn't plan on getting into financial problems. Unfortunately, emergencies can arise that make it impossible to keep up with your bills. When that happens, you need a way to get out from under the all-consuming debt. That's where bankruptcy comes in to play. You may have been doing everything you could to avoid this situation, but now that you're here, bankruptcy may be your only way out. If you've exhausted every other avenue at your disposal, and you're not getting any farther ahead, it's time to face the facts that bankruptcy might be your only recourse at this time. If you're considering bankruptcy, here are three things you should know.

You'll Need Legal Assistance

Bankruptcy is one legal issue that you don't want to go through without legal representation. Even if you don't hire an attorney to do the actual paperwork, you're still going to need legal assistance. For one thing, there are two different types of bankruptcy that individuals can file, chapter 7 and chapter 13. You'll need to know which chapter is going to work best for your situation. For another thing, there are specific steps you'll need to follow when filing for bankruptcy protection. If you haven't spoken to an attorney, you may miss a step, which can cause serious problems for you. Finally, without legal representation, you won't know which assets you can keep and which ones you'll need to liquidate. Don't proceed with your bankruptcy until you've spoken to an attorney.

You May be Able to Save Your Home

If your home is in foreclosure, don't automatically assume that you're going to lose it. In fact, if you file for bankruptcy, you may be able to keep your home and restructure the payments so that you can catch up with them over the course of several years. The best way to protect your home is to file for bankruptcy protection and request a loan restructure. A bankruptcy attorney can help you take care of the paperwork for that.

Your Credit Won't Suffer Irreparable Harm

When you file for bankruptcy, your credit is going to take a hit. In fact, your credit score may go down quite a bit. However, if you continue to avoid your creditors, go into default on your loans, and end up with several collection accounts, your credit score is going to take a big hit anyway. The upside to filing for bankruptcy is that the harm to your credit score won't be irreparable, and it won't be permanent. In fact, once you file for bankruptcy, you'll be able to start rebuilding your credit score almost immediately.

For more information, contact your local bankruptcy law attorney.