Filing for personal bankruptcy is a serious decision. It is vital that you know everything that can happen when you file for bankruptcy. The tips and advice you will learn in this article will show you the proper direction to take. Making the decision to file for bankruptcy isn’t a light one. Use the information provided below to take the correct steps.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. It is pointless to use credit cards if they can be discharged.
If possible obtain a personal recommendation for a bankruptcy lawyer instead of randomly choosing one. There are a number of companies who may take advantage of your situation, so always work with someone that is trustworthy.
Prior to filing your bankruptcy petition, go over the list of assets that cannot be seized by creditors. Bankruptcy exemptions are properties may not be seized during bankruptcy. You need to read the exemptions for your state, so you know what property you can protect. Without reading the list, you may be shocked at which possessions can be taken from you.
Be completely honest whenever you file for personal bankruptcy. Hiding any asset or liability is a risk that will bite you in the end. Penalties may include fines, imprisonment or denial of the filing. Don’t withhold information, and create a smart way of coping with the reality of the situation.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Every one of your debts will be gone if you decide to go with Chapter 7. Any ties you have concerning creditors will definitely be dissolved. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. Be certain to speak with an attorney, not their paralegal or law clerk, since they cannot give legal advice. Look for an attorney until you find one you feel comfortable with.
Safeguard your most valuable asset–your home. Filing bankruptcy does not necessarily mean that you will lose your house. You might be able to keep your home, contingent on certain factors, such as your home decreasing in value or having a second mortgage. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.
Know and understand the difference between filing for Chapter 7 bankruptcy versus Chapter 13 bankruptcy. Take time to research this online and see the pros and cons for filing each one. Before making any decisions, discuss the information you have learned with your lawyer.
Unsecured Debt
Look into filing Chapter 13 bankruptcy. If you have a regular source of income and less than $250,000 in unsecured debt, you can file for Chapter 13 bankruptcy. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. This lasts for three to five years and after this, your unsecured debt will be discharged. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
Do not forget to be around those you love. The process of bankruptcy can seem brutal. It can be long and drawn out which adds lots of stress and leaves people feeling empty inside. Lots of people choose to disappear for a while until the entire process is over and done with. However, you will only feel worse about what has happened, which may lead you into depression. Because of this, it’s vital you keep spending some time with the people you love despite what you are currently going through.
After reading this article, you will know how to file a claim bankruptcy. You may become overwhelmed with the process. If that begins to happen, always refer back to these tips. Think about the tips included above. You will be more likely to make beneficial and thoughtful decisions as a result.
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