Mistakes to avoid when filing for personal bankruptcy
If you are struggling to pay your debts, you have a number of options at your disposal. You can approach your creditors for a waiver or negotiate a repayment plan that will work for you. If these options are not possible, you may consider filing for bankruptcy.
No matter how you handle it, bankruptcy can have a lasting impact on your life. If you handle it right, bankruptcy can give you the relief you need to get back on your feet financially. And if you mismanage it, bankruptcy can compound your financial woes. It is for these reasons that you need to avoid the following mistakes when declaring bankruptcy in Tennessee.
Filing the wrong chapter
Personal bankruptcies fall into two categories – Chapter 7 and Chapter 13 bankruptcies. It is important that you understand how these types of bankruptcies differ. If you are seeking to discharge unsecured debts like medical debts, credit card debts and unsecured loans, then you need to file for Chapter 7 bankruptcy. However, if you are dealing with secured debts like a mortgage or a car loan, then you need to file Chapter for 13 bankruptcy. Filing the wrong chapter can lead to the refusal of your claim, and this can be a huge setback for your debt relief quest.
Waiting too long to act
People delay filing for bankruptcy for a variety of reasons. Some delay the process out of misunderstanding or fear. Still, others delay the process in an attempt to “buy time.” Either way, overlooking the writing on the wall can give your creditor room to do the following:
- Place liens or obtain judgments on your property
- Foreclose your home
- Repossess your vehicle
- Start garnishing your paycheck
Are you drowning in debt? Bankruptcy can give you a fresh start. To get the most out of it, however, you need to know the missteps to avoid when declaring bankruptcy.