Declaring bankruptcy is anything but easy. You need to know what type of bankruptcy you should file for based on your current finances and the type of debt you have. You should learn as much as possible about personal bankruptcy if you are trying to make a decision to file or not. In the following paragraphs, you’ll find some tips that will get you off to a good start.
Be sure everything is clear to you about personal bankruptcy via looking at websites on the subject. The U.S. DOJ, the NACBA, and the ABI all have useful information. The more you know about it, the better you are able to make the best decision for your situation and to make sure that the bankruptcy proceedings move forward with minimal setbacks.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. If the tax can be discharged, so can the debt. Because of this, transferring the debt to your credit card is pointless.
Unsecured Credit
It’s not uncommon to learn soon after bankruptcy that you are unable to get an unsecured credit card easily. If you do, then try applying for a coupe of secured cards. This will demonstrate that you’re seriously trying to restore your credit. Once you’ve built up a history of on-time payments, you may start getting unsecured credit again.
Determine which assets won’t be seized before filing for bankruptcy. The Bankruptcy Code provides a listing of the various asset types that are not included in the bankruptcy process. It is important to be aware of this list so you will know what assets are saved. It is important to know what types of possessions may be taken away before they actually are seized.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. The person you choose to file with needs to know both the good and bad aspects of your finances. Do not hold back anything, and form a sound plan to make peace with your reality.
Do not abandon hope. You can often have property returned to you. Autos, jewelry and even electronics that have been repossessed, could be returned. Any property repossessed within 90 days before filing bankruptcy, may be able to be returned to you. Get the advice of a qualified attorney who can advise you about ways to accomplish this.
When you do meet with a lawyer make sure that they answer all of your questions and that they do not charge you for consultation alone. Most lawyers offer free consultations, so consult with a few before settling on one. Choose an attorney who is experienced, educated and well-versed in bankruptcy laws. There is no need to feel rushed to decide to file after you talk with your bankruptcy lawyer. Take the time to meet with a number of attorneys.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. There are numerous programs out there that may assist you with your debt, like a credit counseling program, a nonprofit group, government assistance, etc. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
Chapter 13 Bankruptcy
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7, for example, will wipe away every one of your outstanding debts. All of your financial ties to the people you owe money to will disappear. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. It is vital that you know the differences between these types of bankruptcies, in order to find the option that’s best for you.
You can take steps to hang onto your house. Bankruptcy filings do not necessarily mean that you have to lose your house. There are mitigating factors, such as lose of value, or multiple mortgages. There are other options such as a homestead exemption which offers you a chance to remain in your home, depending on whether or not you meed certain financial conditions.
Remember to only file for bankruptcy if you need to. You may find consolidating your debt may be simpler. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. It will also make it tough for you to secure credit after your filing is complete. Thus, you must make certain that bankruptcy really is the only viable solution to your problems.
As you now know, bankruptcy is not a decision that should be made lightly. If you choose bankruptcy as a financial answer for your situation, you can only benefit from having a lawyer dedicated to this industry to help you out.
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