The circumstances that culminate in a bankruptcy filing are likely unpleasant, though they do not need to define the rest of your life. With a clean slate, it is possible to start over both financially and personally. Read this article to learn how bankruptcy is a constructive, not destructive, process in reshaping your financial situation.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Personal Bankruptcy
Before filing for personal bankruptcy, make sure you are doing the right thing. Look into other options, such as consumer credit counseling. Be sure to consider all options before filing for personal bankruptcy, as this will take a large toll on your credit score for the next ten years.
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. You should never touch your retirement accounts, unless you have absolutely no choice. Using your savings is necessary, but decimating it and leaving yourself dangling with no future financial security is not a good idea.
Research what assets are exempt from seizure before you decide to declare bankruptcy. The federal statutes covering bankruptcy can tell you exactly which assets are exempt from forfeiture to pay off creditors. Make sure that you carefully look over this list prior to filing to discover if your valuable assets will be seized. This will ensure that you do not have any surprises once you have filed bankruptcy.
No good will come of trying to conceal your assets or your liabilities in the bankruptcy process; you want to be scrupulously honest when you declare bankruptcy. Your bankruptcy lawyer has to know every detail of your finances, whether bad or good. Never hide anything, and make sure you come up with a well devised plan for dealing with bankruptcy.
Take advantage of free consultations with lawyers and the ability to sift through and find the right one. It is important to meet with the actual attorney, not the attorney’s assistant or paralegal; those people are not permitted to give legal advice By shopping lawyers, you will be more likely to find one that makes you comfortable about the process.
Before filing a bankruptcy claim, make sure that your home is well protected. Filing for bankruptcy does not mean you have to lose your home. You could keep your home; it depends on your home’s value or if a second mortgage is on your home. 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.
Bankruptcy Filing
Filing for bankruptcy is not the best choice if your monthly income is enough to cover your bills. Remember that the record of your personal bankruptcy filing will be discernible on the report of your credit for as many as 10 years. For this reason, bankruptcy filing should not be taken lightly.
Look into all of your options before you choose to file for bankruptcy. There are many recouses available to help you lower your payments and get back on track. Loan modification can help you get out of foreclosure. The lender is able to help you in a number of ways, such as reducing interest rates, eliminating late charges, and even lengthening the loan, giving you more time to pay. Many times creditors are happy to work with you to ensure that you will repay your loan.
Take action when the time is right. The timing of your filing could be important to its success. In some situations it is best to file as soon as possible, but in other situations it is best to wait until after you’ve gotten through the worst of it. Discuss your particular situation with your bankruptcy attorney to determine the best time to file.
File for bankruptcy before your finances get completely out of control. The judge reviewing your petition will consider your recent behavior, purchases, income and payments when making a decision. It is very common for personal debts to snowball suddenly. When this happens, terrible consequences, such as wage garnishment and foreclosure result. Speak with a bankruptcy lawyer as soon as you become aware that you cannot handle your debts.
Bankruptcy laws are very exact and very important, so ensure that you’re well aware of all current laws before you file a petition. Did you know that in some areas, you cannot transfer assets from yourself to another person in the year previous to filing occurring? Maxing out your credit cards immediately before filing is also illegal.
You will find many people, who have filed for bankruptcy, completely separate themselves from ever using credit again if possible. Although this may seem plausible, this actually isn’t doing them any good. If you do not use credit, you will not rebuild the type of credit you will need in making future purchases. Start with one credit card to get your credit going in the right direction.
You do not lose everything that you own when you decide to declare bankruptcy. You can keep some personal property. This includes some jewelry, clothing, household furnishing, electronics and more. It is even possible that your home and one car will be safe, depending on the laws in your state, your exact financial situation, and the Chapter which you file under.
Learn from the mistakes you made that sent you to bankruptcy court. Life after bankruptcy can be normal and happy. Bankruptcy may well represent the point where you turn your life around, and you can handle it better by making use of the suggestions this article has provided.
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