Do not take bankruptcy lightly, this is a serious thing. Therefore, it is very important to understand what you are doing when you file for bankruptcy. Use what you learn here to guide you towards making the right decisions regarding personal bankruptcy. Proper research can assist you with any choices you have to make.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Should the tax be dischargeable, the debt is often dischargeable as well. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
If you know people who have filed for bankruptcy, ask them who they would recommend rather than relying on Internet reviews or worse, just randomly picking someone out of the phone book. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.
Stay positive. Bankruptcy might help you get back things you thought you’d lost and had repossessed, such as electronics, vehicles and jewelry. If your property has been repossessed less than 90 days prior to your bankruptcy filing, there is a good chance you can get it back. Speak with your attorney about filing the correct petition to get your property back.
Any bankruptcy consultation should be free of charge. Most attorneys offer a free consultation which you should take advantage of. Meet with a few before finalizing your plans. Make your decision after all of your questions have been answered. Take your time choosing the right attorney to assist in your bankruptcy. Take the time to meet with a number of attorneys.
Chapter 7
The two main kinds of bankruptcy are Chapter 7 and Chapter 13. Make sure you understand them so you know what is best for you. In Chapter 7 most of your outstanding accounts will essentially be erased. You will no longer be liable for any money that you owe to your creditors. If you file using chapter 13 bankruptcy, you will go through a sixty month repayment plan prior to all your debts being completely dissolved. 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 lawyers offer free consultations, so go to several before choosing one. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. Comparing different lawyers makes it possible to find one with whom you work well.
Be sure your home is well protected. It isn’t inevitable that you will lose your house when you file for bankruptcy. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your 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.
Remember to only file for bankruptcy if you need to. Consolidating current debt could make it easier to manage. Going through a bankruptcy is a long and stressful process. It will also make it tough for you to secure credit after your filing is complete. Thus, you must make certain that bankruptcy really is the only viable solution to your problems.
Repayment Plan
There are many ways to resolve financial difficulties other than bankruptcy, and you should investigate all of them first. You might be able to address your debts by arranging a repayment plan or a reduction in your interest rates. Get professional advice on these matters from a bankruptcy lawyer. Loan modification plans can help if you are dealing with foreclosure. These plans allow you a longer pay off period by extending the term of the loan, reducing the rate of interest or forgiving late fees. When all is said and done, the creditors want their money, so sometimes it’s best to deal with a repayment plan than with a bankruptcy debtor.
If you decide to file for bankruptcy, it’s important that you’re educated about your rights. Do not rely on your debtors information about whether or not certain loans can be included in your bankruptcy. There are very few debts, such as child support or student loan debt, that can’t be bankrupted. If the debt collector tries to tell you that your debts, which do not fall into those categories, cannot be bankrupted, take a note of it, look up the debt type, and report them to your state’s attorney general office.
As you have seen, filing for personal bankruptcy can be complicated. Do not let the wealth of information become overwhelming. Take a few minutes to think about these tips. When you think things through, you make good decisions in life.
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