You should find out the experience level of your perspective attorney. How many bankruptcy cases do they deal with a year and how long have they been practicing bankruptcy law. They should be honest, efficient, and have a great reputation.

Once someone has decided to file for bankruptcy, there are several pitfalls they often fall into. Some decide they want to accumulate debt in hopes of having it restructured in bankruptcy. Others ignore their current situation and pay back family and friends or ignore lawsuits against them. Others make the mistake of trying to save money and represent themselves in bankruptcy or aren’t completely honest about their financial situation with their lawyer. All are costly mistakes.

The answer to this question primarily depends on whether or not you would like to keep your home. If you are fine with your home being sold to reconcile your debt with the mortgage company, Chapter 7 is probably the right choice for you. If you would like to remain in your home, then Chapter 13 is your desired filing status.

There are numerous myths that people believe about bankruptcy including: that they will never be able to borrow money again; that both spouses in a marriage will have to file for bankruptcy; and that it is really difficult to file for bankruptcy. Other people wrongly believe that filing for bankruptcy helps their credit rating or that you can only file for bankruptcy once.

Qualifying for bankruptcy differs from state-to-state and is complicated to determine. The means test was recently established to determine who is qualified for what type of bankruptcy. Suffice to say, around 70 percent of people who file for bankruptcy qualifies.

The two types of personal bankruptcy that individuals can file under are Chapter 7 bankruptcy, often called a liquidation plan, and Chapter 13 bankruptcy, often called the debt restructuring plan.

The benefits of filing for bankruptcy are numerous. First of all, it restructures your debt, making it more manageable. Bankruptcy also offers peace of mind by taking the burden of dealing with creditors off the debtor and also sheds the obligation to pay all of their debts. Moving forward, filing for bankruptcy helps you get a new start and equips you with useful new financial skills.

There are a number of options people have to avoid filing for bankruptcy. First, they can sell assets and restructure living expenses. Other options include home equity debt consolidation loans and credit counseling services. Additionally, you can proactively negotiate payment terms with your creditors.

A bankruptcy legally can stay on your credit report for up to 10 years. The first way to rebuild your credit is by making sure that accounts are shown as included in bankruptcy and don’t remain open. The primary way to build back your credit score is by attaining and using credit. Sometimes that means applying for secured credit cards, which are usually reserved for people with poor credit but it can also include car payments. However, be prepared to pay hefty interest on these loans.

Some of the warning signs that you are accumulating too much debt include a lack of any money in savings and paying only minimum payments on credit cards while continuing to make new purchases on those cards. Additionally, if you find yourself making late payments on bills or credit cards, or you find yourself bouncing checks or over-drafting your checking account, you are accumulating too much debt.