It may not be an easy decision to come to; however, bankruptcies are often necessary. When going through this process it is best you have a lot of knowledge on what is about to take place. Keep reading for information that can help you get through this trying time.
Credit Cards
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. It is pointless to use credit cards if they can be discharged.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. Retirement accounts should never be touched if it can be helped. You may need to use some of your savings; however, you should not use all of your savings. Remember that you must safeguard your future financial security.
Check the accuracy of all information before it is filed. Inaccurate or incomplete information can lead to your petition being denied. It’s your financial future that is in his hands; don’t hesitate to speak up.
Look for a bankruptcy lawyer that comes from a personal recommendation instead of someone random on the Internet or in 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.
Research what assets are exempt from seizure before you decide to declare bankruptcy. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. Make sure that you review this list before you decide to file, to see if you can hang on to your most important possessions. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
Avoid paying for a consultation with the bankruptcy attorney, but do ask many questions. Free consultations are standard practice among bankruptcy lawyers, so interview multiple candidates before making a final decision. Only choose an attorney once all your concerns are answered to your satisfaction. After the consultation, you are not immediately required to come up with a decision. Consulting with several attorneys will also help you find someone you trust.
Before you file for personal bankruptcy, be sure that you are cognizant of all current laws. If you want to file for bankruptcy successfully, it’s important to review the latest applicable laws. They tend to change frequently. To learn about any changes, search the Internet or contact your state’s legislative office.
Filing for bankruptcy is not the best choice if your monthly income is enough to cover your bills. Understand that while declaring bankruptcy will eliminate many of your debts, you will have difficulty obtaining credit and will pay more in interest for the credit you do receive for at least seven years.
After your initial filing, take time to enjoy yourself a bit and get your mind off of it. Filing is the most intensive step in the process, so afterwards it’s important to let go of some of your stress. This stress may lead to something worse like depression, so do what you can to fight that from happening. Remember that your situation is going to improve after you file for bankruptcy.
If you have fears that you will lose your car, ask your lawyer about the possibility of lowering your car payments. In many cases, you can reduce your payment by filing a Chapter 7 petition. You need to have bought your car 910 days before you file, have a loan with high interest and you’re also going to need a good work history.
Nobody enjoys filing for bankruptcy, but at times, you can’t avoid it. Now that you’ve read over this article, you learned some things that are from others who have experienced this too. Gleaning insight from others who already walked the same path can minimize complications and help to reduce your own stress at a difficult time.
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