Most people do not think they will ever need to consider filing for bankruptcy. Sometimes it’s the only way out of a nasty financial mess. If you are approaching a bankruptcy situation, reviewing the advice presented below may help you understand what happens next.
Individuals often seek to file for personal bankruptcy protection if their debts exceed their ability to repay them. If you are in this position, you need to be familiar with the laws in your area. Laws differ from one state to the other. For instance, in some states you can keep your home and car, while other states prohibit this. See to it that you understand the bankruptcy laws in the area that you live prior to filing.
Think twice if you have struck upon the idea of paying off your taxes by credit card and subsequently filing for personal bankruptcy. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Remember that if you can discharge the tax you can discharge the debt. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Before you file for bankruptcy, carefully consider if it is the right option for you. You can also avail yourself of other options, such as consumer credit counseling. Your credit score will be forever effected by bankruptcy, which is why you should do everything else in your power to resolve matters first.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. You want your bankruptcy to go smoothly, and the Internet is rife with fly-by-night companies whose only goal is to prey upon the financially desperate.
You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. The Bankruptcy Code has lists of various asset types that are exempt during the process. Be sure that you study this list. Make yourself aware of any assets you have that could be seized. If you fail to do so, things could get ugly.
You must be entirely candid when it comes to declaring assets and obligations in your bankruptcy petition. It is necessary to be open regarding both the positive and negative aspects of your financial life. Being honest is both the right thing to do and, moreover, it is required by law.
If you’re filing for bankruptcy soon, be sure you are going to hire a lawyer. Personal bankruptcy is quite complex, and it is entirely possible that you will not be able to familiarize yourself with all the laws and processes. A lawyer that specializes in bankruptcy can make sure you are following the correct procedures in your filing.
Before you decide to file bankruptcy, be sure to check for any new laws that may apply to your case. Bankruptcy laws constantly change and it’s crucial you know about them so you the process of filing for bankruptcy goes smoothly. A qualified bankruptcy attorney is the best source for the latest information regarding the laws in your state.
Before making your decision to file for bankruptcy, double-check to see if other, less drastic options could make sense. For example, you want to look into credit counseling. This is the best option for small debts. Also, if you just contact your creditors and speak to them plainly and truthfully, the odds are good that you can negotiate a better payment structure that you can afford.
Chapter 7
The two main kinds of bankruptcy are Chapter 7 and Chapter 13. Make sure you understand them so you know what is best for you. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. Your responsibilities to your creditors will be satisfied. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
When you are forced to file for bankruptcy, you should have some excellent knowledge on what to do. Your process will be easier if you have the information. This article has provided much of that information, so that you can approach your finances in a less stressed state of mind.
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