Filing personal bankruptcy is a somewhat complex process. Several different types or “Chapters” of bankruptcy are available to you. Depending on the state of your finances and the type of debt that you have accrued, you may qualify for one type of bankruptcy, but not another. It’s imperative that you learn everything you can about the process before you even think about filing. In the following paragraphs, you’ll find some tips that will get you off to a good start.
Credit Card
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. Bear this in mind; if the tax can be discharged, then the debt can be as well. Because of this, transferring the debt to your credit card is pointless.
Don’t try to hide anything if you are filing for bankruptcy, as this will hurt you in the long run. Whoever provides your legal consultation must be privy to all of your financial information. Keeping secrets or trying to outsmart everyone is not a wise move.
Hire a lawyer if you plan on filing for bankruptcy. The topic of bankruptcy is a complicated one and it is important that you know all about it. When you engage the services of a bankruptcy lawyer, you can be assured of getting the help your need to proceed correctly.
Stay abreast of new laws that may affect your bankruptcy if you decide to file. If you want to file for bankruptcy successfully, it’s important to review the latest applicable laws. They tend to change frequently. Your state’s legislative offices or website will have up-to-date information about these changes.
Chapter 7
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Should you choose Chapter 7, your total debt load will be erased. All creditor relationships will be severed. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. You must know about the different bankruptcy types, and how each can affect you.
A lot of bankruptcy attorneys will let you have a consultation, so try several out. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. Look for a lawyer who you can relate to.
You can take steps to hang onto your house. Bankruptcy doesn’t always mean you’ll lose your home. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
Before you file for personal bankruptcy, weigh all of your options. There are many recouses available to help you lower your payments and get back on track. If you are about to lose your house, talk to your lender about a loan modification. Your lender can help you get current on your loan by offering you one of a number of modifications, such as getting rid of late charges, lowering interest rates, or extending the length of the loan. Making arrangements with the creditors to make reasonable payments towards you debt is a much better plan than bankruptcy because the lender simply wants the loan repaid.
If you are in the midst of a Chapter 13 bankruptcy, it is possible to apply for certain loans. It is a little more difficult, though. Your trustee must approve any new loans such as this. You will need to make a budget and prove that you will be able to afford your new loan payments. You also have to prepare yourself to explain the reasons you need to buy the item.
There is a great amount of emotional and mental stress associated with filing for bankruptcy. To relieve yourself of some stress and keep thing organized, hire a good lawyer. Don’t let cost be the sole factor in who you hire. You do need someone who is costly, just someone who is good at what they do. Get referred from others who’ve been in the same situation, check the BBB, and interview several people through free consultations. Often, watching a bankruptcy proceeding can give you clues to the quality of a lawyer.
Now you know that filing for bankruptcy is something to be considered before going through with it. If you feel that it is best for you to file for bankruptcy, a qualified attorney can be of great assistance, ensuring you make the best choices.
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