Mention of the word, “bankruptcy” is enough to terrify many. Increasing debt, along with being unable to support a family can be an actual nightmare for some. If these circumstances sound familiar, you stand to benefit from the tips that follow.
Credit Cards
If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
If you are feeling like you are seriously going to have to file for bankruptcy then do not clear out your savings. Don’t touch retirement accounts unless you don’t have a choice. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
Try to find a bankruptcy attorney who is personally recommended, rather than off the Internet, or out of the yellow pages. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Most lawyers offer free consultations, so consult with a few before settling on one. Only choose an attorney once all your concerns are answered to your satisfaction. Take your time before you decide to file after you meet with your lawyer. So you have sufficient time to speak with a number of lawyers.
Learn of new laws prior to deciding to file for bankruptcy. If you want to file for bankruptcy successfully, it’s important to review the latest applicable laws. They tend to change frequently. To find out about these changes, you can look at your state’s legislation website or contact their office.
Chapter 7
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. The Chapter 7 variety can help you eliminate your debts almost entirely. Your ties with all creditors will get dissolved. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. Ensure that you have a meeting with a real lawyer instead of an assistant, since they can provide the best advice. By meeting with several attorneys through a free consultation you will be able to choose which attorney you feel more comfortable with.
Learn the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Take time to research this online and see the pros and cons for filing each one. If you do not understand what you are reading, talk to your attorney before making that serious decision.
Be sure that bankruptcy really is your best option. You may find consolidating your debt may be simpler. It is not a quick and easy process to file for bankruptcy. You should be aware that there are some negative ramifications to it, like extreme damage to your credit score. Therefore, you need to be sure that you really have no other option than to file for bankruptcy.
Chapter 13 bankruptcy might be a good option, so don’t overlook it. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. The length of the plan is generally up to five years, and when this is over, you will be free of unsecured debt. Keep in mind that missed payments will trigger dismissal of your case.
Don’t hide from your friends and family while you go through bankruptcy. The bankruptcy process can be brutal. It takes time and a lot of people feel stressed and ashamed throughout this procedure. A lot of folks decide to hide themselves from the world around them until the end of the process. However, this isolation will just make you feel worse, and it could cause you to be depressed. So, it is critical that you keep spending time with the ones you love, regardless of the current financial situation.
Speak with your attorney about ways you can keep your car. You can often lower your payment using Chapter 7 bankruptcy. You must have bought the car 910 or more days before you filed, the loan must have a high interest rate, and you have to have a secure and steady working history in order for that to work.
Do not omit any information about your finances, assets or debts when filling out your bankruptcy paperwork. Forgetting to add these may cause your petition to be delayed, or even dismissed. Add absolutely everything to your list, including small amounts. This may include secondary employments, vehicles you own and loans you still owe money on.
Personal Bankruptcy
Learn and understand the laws and rules regarding personal bankruptcy filings, before you decide to file. There are several pitfalls with personal bankruptcy that can make your case harder to handle. If you make an egregious mistake, the judge might even dismiss your case. Before you begin bankruptcy proceedings, research as much as you can. The entire process will be much easier when you move forward with awareness.
Many people are frightened of bankruptcy, and rightly so. Even though you may be afraid, the following article can remove some of the mystery for you. Apply what you’ve learned here, and get a fresh start for you and your family.
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