The specter of bankruptcy can cause many individuals to break out in a cold sweat. A lot of debt and not being able to support your family can be real frightening. If this troubles you, or if you are dealing with this nightmare now, the following information is required reading.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Remember that if you can discharge the tax you can discharge the debt. This makes using a credit care irrelevant, since bankruptcy will discharge it.
Before filing for personal bankruptcy, make sure you are doing the right thing. You have better options. For example, you could try credit counseling. Bankruptcy leaves a permanent mark on your credit history, so before you take such a large step, you want to exhaust all other options so that the future effects on your credit history are as minimal as possible.
Retirement Accounts
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Don’t touch retirement accounts unless you don’t have a choice. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.
Ask those you know if they have an attorney to recommend, instead of finding one on the Internet or in the phone book. There are a number of companies who may take advantage of your situation, so always work with someone that is trustworthy.
Seek a less serious option prior to filing for bankruptcy. For example, consumer credit counseling programs can help you by renegotiating your debts with your creditors into payments that you can afford. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. Meet with the actual lawyer, not a paralegal or assistant, as they’re not allowed to give out legal advice. Interviewing multiple attorneys is a good way to find the best fit.
When filing for personal bankruptcy you should always be aware of your rights. There are bill collectors who will claim that you cannot add your debts to your bankruptcy case. There are very few debts, such as child support or student loan debt, that can’t be bankrupted. If these are not the categories in which your debts fall, double check to see if the type of debt can be bankrupted. If it can, be sure to file a complaint about the debt collector with the office of the state attorney general.
Bankruptcy is a difficult and stressful process, and you will need all the help you can get. To have a reliable and trustworthy guide through the process, find a highly qualified attorney. Look beyond the fees a lawyer charges when you make your hiring decision. Choosing a lawyer should be based on finding one with a proven track record who can give you the help that you need. When deciding on an attorney get referrals, contact your better business bureau or get a free consultation from at least three attorneys. You can attend court hearings if you want to see a prospective attorney in action.
Prior to filing, it is important that you know all about bankruptcy laws. For instance, you may not be aware that a filer is forbidden from transferring assets from his or her name for one full year before the petition is filed. It is also illegal for someone who files for bankruptcy to drastically increase their debts on credit cards immediately before filing.
Research your state’s bankruptcy laws before filing your petition. There are many issues with personal bankruptcy code, and these pitfalls can cause problems with your case. Some mistakes could lead to having your case dismissed. This is exactly why it’s imperative that you take the time necessary in order to research what you can about bankruptcy. Doing so will pave the way to an easier process.
Do not pay off debts blindly before you file a personal bankruptcy. The laws surrounding bankruptcy often prohibit paying back certain creditors up to ninety days prior to filing, and family members up to a year! So, before you ultimately decide to file a claim, be sure that you understand the rules in place.
Adopt a positive attitude toward filing for bankruptcy and researching the topic. Although it may be very difficult to admit that bankruptcy is the answer for you, it will be much harder to continue spiraling into a debt quagmire. Speaking with someone knowledgeable as soon as you can helps get you started on the bankruptcy process before your situation becomes any worse.
Filing for bankruptcy can be a very scary and intimidating experience. Though the fear may be great, you can alleviate some of that with this article. Utilize these tips immediately to improve your financial situation.
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