When someone files for bankruptcy, it’s not a good thing. Bankruptcy is often a dire sign in a person’s financial life, and can cause significant embarrassment and shame. Read this article to learn more about bankruptcy and make the best decision.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. If the tax can be discharged, so can the debt. Because of this, transferring the debt to your credit card is pointless.
Any bankruptcy consultation should be free of charge. It is a good idea to consult several attorney before deciding on one. Therefore consult with different lawyers and get a feel for them, then decide which one suits your needs It is not necessary to make a final decision right away. Take the time to meet with a number of attorneys.
Do some research about laws and legislation before filing. The laws are constantly undergoing changes, so you must stay on top of them if you are going to file for personal bankruptcy correctly. To learn about the changes, you should check out the website of your state’s legislation or you can call their office.
Chapter 7
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. Your ties with all creditors will get dissolved. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. Both options have advantages and drawbacks, so do your research before deciding.
Meet with a few attorneys who offer free consultations before hiring one. Make sure that you meet with an actual lawyer and not an assistant or paralegal, as these people are not allowed to provide legal advice. Take some time to talk to different lawyers to find one that fits your needs, and meshes well with you.
Be sure your home is well protected. Filing for bankruptcy will not always result in losing your home. It is entirely possible that you will be able to keep your home. This is dependent upon the your home’s value and whether or not you have taken a second mortgage. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
Interest Rate
Before declaring bankruptcy, see if there’s anything less drastic you can do to repair your credit. Find out if you can receive a reduced interest rate or altered repayment plan instead of bankruptcy filing. Loan modification can help you get out of foreclosure. Sometimes your lender will work with you to help pay off your debt by giving you a lower interest rate, forgiving late fees, or extending the time period of your loan. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
Once your initial filing is complete, it is time to take some time to relax a little. Many debtors stress-out during the time of filing. Depression can ensue from the stress if action isn’t taken. Once your petition is in the hands of the judge, all you can do is wait.
Don’t wait till it’s too late to file for bankruptcy. Often, people try to act like they are not in financial straits. They imagine the issues will blow away, but they do not. Debt can snowball very fast, and by ignoring it, you increase the chances of worse problems, such as foreclosure and wage garnishments. As soon as you’ve decided that you no longer have a handle on your debts, consult a bankruptcy lawyer to see if bankruptcy is right for you.
Make sure that you disclose every bit of financial information on your bankruptcy petition. Overlooking any information can result in a delayed or rejected petition. No matter how insignificant a sum seems, include it in the documentation. Current loans, second jobs and assets ought to be included.
Long before you file any paperwork dealing with bankruptcy, your first step should be learning the rules and the process. There are many laws which govern bankruptcy; therefore, to protect your bankruptcy case, know the rules. You might find that your case become dismissed because of a mistake. This is exactly why it’s imperative that you take the time necessary in order to research what you can about bankruptcy. The proceedings will be much smoother with this information.
Look into other options before deciding to file for bankruptcy. One good option might be credit counseling. There are many non-profit debt counseling services available. They will negotiate with your creditors in order to reduce your payments and interest rates. You will pay them, and in turn, they will pay the people you owe money to.
Do not take a large cash advance from credit cards prior to filing, knowing that bankruptcy erases all debts. This is fraud, and you will be required to pay that money back.
As you can see, you do not have to resort to bankruptcy. The advice you have read here will show you how you can escape the need to file for bankruptcy. If you begin using the tips you learned right away, you will surely see a big change in your life, and perhaps you will be able to save your credit history.
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