Bankruptcy Tips That Will Help You

The path to bankruptcy is not normally a happy one, but your life can improve once the filing has occurred. Bankruptcy exists in order to provide you with a fresh start. Keep reading for how you can make bankruptcy a second chance instead of financial doom.

Visit web sites and read information to learn as much as possible about the topic of personal bankruptcy. Many sites, including the U.S. Department of Justice and National Association for Consumer Bankruptcy Attorneys provide excellent information. The more you know, the better equipped you’ll be to make the wise decisions needed for a successful bankruptcy.

Credit Card

Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.

Be certain you are making the right choice before you file for bankruptcy. Debt advisors are one of the many other avenues you can consider. Your credit score will be forever effected by bankruptcy, which is why you should do everything else in your power to resolve matters first.

Determine which assets won’t be seized before filing for bankruptcy. The Bankruptcy Code includes a list of the types of assets that are exempt from the bankruptcy process. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. You wouldn’t want to unexpectedly lose any possessions you treasure.

You must be absolutely honest when filing for personal bankruptcy. If you try to hide any of your information, it will eventually surface and cause you problems. Your attorney and trustee should be privy to all information about your finances. Don’t withhold information, and create a smart way of coping with the reality of the situation.

Chapter 7

You need to educate yourself on the differences between Chapter 7 and Chapter 13. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. Any debts that you owe to creditors will be wiped clean. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. It’s important to know what differences come with every type of bankruptcy. This will let you find out what’s best for you.

Many bankruptcy attorneys offer the first consultation with no charge, so consult with several before deciding on one. Ensure that you have a meeting with a real lawyer instead of an assistant, since they can provide the best advice. Take some time to talk to different lawyers to find one that fits your needs, and meshes well with you.

It is important to protect your home when filing bankruptcy. 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. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.

Chapter 13

Consider if Chapter 13 bankruptcy is an option. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. The plan is usually for a term of three to five years, and a discharge will be granted at the end of that term. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.

After you have finished with the initial process of filing, you can relax and take a breather. It can be several months between the initial filing and the final discharge of debts. This kind of stress can take a heavy toll on your personal life, especially if you are not making any efforts to adopt a positive attitude. Your life will see improvement after you get past the bankruptcy.

Filing for bankruptcy can cause stress. Working with a good bankruptcy lawyer can help make the process a lot smoother and less stressful for you. Try not to pick a lawyer based on cost alone. There is no need to use an expensive attorney. The important thing that you must do is to get a good attorney. Do not choose an attorney until you have interviewed them, checked with the better business bureau and checked their standing with the bar association. Try to get a referral from a trusted friend or family member.

Consider other options prior to filing for personal bankruptcy. For example, you may want to think about credit counseling. There are many different non-profit companies that can help you. They will work with your creditors to get your payments lowered and your interest lowered as wll. You’ll make your payments to the company, and the company will pay off your creditors.

Don’t take large cash advances from credit cards prior to filing since the debts will be eliminated from these cards. Not only is this fraud, but you could still be liable to repay the money at the end of the day.

Find out how much you owe to your different creditors. This will be where you start your bankruptcy filing. Be sure you’re including every debt. Search your financial records to be certain that every amount on your list is exactly correct. It can be difficult or even impossible to discharge your debts if you report them inaccurately; be sure that you double check your figures.

As stated before, unhappy events may have led you to declare bankruptcy. But, that does not mean life after bankruptcy has to be negative. Actually, if you use the advice and ideas from this article, you will be able to turn bankruptcy into a turning point for your life.

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