Are you in a financial jam and you feel like bankruptcy is the only option for you? Do not feel as if you are on your own. Millions of people, each year, have chosen bankruptcy as their only option for financial freedom. The article below discusses some information and tips to help you make sense of bankruptcy.
Filing for bankruptcy is something many people are forced to do when there debts become too much of a burden, and they can no longer afford to pay them. If you’re in this position, it is a good thing to familiarize yourself with the laws that apply in your area. Each state has its own set of rules regarding bankruptcy. For instance, in some states you can keep your home and car, while other states prohibit this. It is best to become familiar with your state’s laws regarding bankruptcy before you take the steps to file.
Personal Bankruptcy
Visit web sites and read information to learn as much as possible about the topic of personal bankruptcy. The United States Department of Justice, American Bankruptcy Institute, along with many other websites can provide you with the information you need. You will find that the process of filing for personal bankruptcy is easier and less of a hassle with the more information on the subject you gather ahead of time.
Do not use your retirement fund or savings to pay off creditors. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
When you document your financial records, it is vital that you are 100% truthful in order to have a successful resolution to your bankruptcy process. Withholding or lying about certain information can seriously worsen your financial situation. It could lead to being unable to file for bankruptcy or even legal trouble.
Don’t feel bad if you need to remind your attorney about any specifics of your case. Don’t assume that he will remember something you told him weeks ago. Speak up, because it is your future on the line.
Meet with a few attorneys who offer free consultations before hiring one. Make sure you meet with a licensed attorney rather than a paralegal or assistant, because it is illegal for these people to give legal advice. Searching for the best lawyer will help you located the comfort you need during this time.
Safeguard your home. It isn’t inevitable that you will lose your house when you file for bankruptcy. 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. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Investigate your other alternatives before you decide you have to go with bankruptcy. Perhaps consolidating your existing debt can make it easier to manage. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. It will also make it tough for you to secure credit after your filing is complete. This is why you must make sure bankruptcy is your last resort.
Unsecured Debt
Consider Chapter 13 bankruptcy. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
Speak with your attorney about ways you can keep your car. Filing under Chapter 7 is usually a good way to lower your payments. In order for this to be considered, your car loan must be one with high interest, you need a solid work history and the car should have been bought 910 days or more prior to you filing.
If you are going to file for bankruptcy make sure you are prompt. Lots of people turn the other shoulder towards their financial woes and hope that they’ll disappear eventually. However, you should never do this. It is too easy for debt to mount up and become uncontrollable, which could lead to loss of assets or wages. When you make the connection that your debt level is too high, contact an attorney that specializes in bankruptcy as soon as possible, to see what can be done.
Know the bankruptcy code backwards and forwards before filing. For instance, you need to know not to shift assets into someone else’s name in the year leading up to your filing. It is also illegal for someone who files for bankruptcy to drastically increase their debts on credit cards immediately before filing.
Be careful on how you pay your debts before you file a personal bankruptcy. The laws regarding bankruptcy most often prevent you from paying back some creditors for up to 90 days before filing, and friends and family for up to one year. You need to know the law before you decide to file for bankruptcy.
As mentioned, you are not alone in needing to file for bankruptcy. Yet one thing you have that others who file do not is the information from this article. Utilize the tips you learned today and ensure that there is no rough spots when filing for bankruptcy.
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