Most people consider bankruptcy as a choice of losers, but quickly change their mind when it directly affects them. A financial catastrophe, like a major medical emergency, can cause someone to face bankruptcy. This article contains advice to help you if you are considering bankruptcy.
Bankruptcy Laws
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If this sounds like you, start familiarizing yourself with your state laws. Bankruptcy laws vary from state to state. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. See to it that you understand the bankruptcy laws in the area that you live prior to filing.
Do not use a credit card to manage your tax issues and then try to file bankruptcy. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. It is pointless to use credit cards if they can be discharged.
Try going to a personally recommended bankruptcy lawyer instead of using a phone book or the Internet. There are lots of unsavory companies and lawyers out there who prey on people who are in desperate straits. It is up to you to find someone that is trustworthy and can make the process go smoothly.
Be as honest as you possibly can when filing for bankruptcy; hiding liabilities or assets will only hurt you in the long run. Regardless of the agency you file with, ensure that you tell them all they should know about your current financial situation, regardless of how good or bad it is. Be completely honest in your paperwork to avoid a situation that may end in severe punishment.
You should not have to pay for a consultation with a bankruptcy attorney. Make sure you ask lots of questions. Most lawyers offer free consultations, so consult with a few before settling on one. Only choose an attorney once all your concerns are answered to your satisfaction. After the consultation, you are not immediately required to come up with a decision. This will give you extra time to interview several attorneys.
Investigate any new laws before deciding to file a bankruptcy. Bankruptcy laws constantly change and it’s crucial you know about them so you the process of filing for bankruptcy goes smoothly. To stay up-to-date on these laws, check out your state’s government website.
Chapter 13
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Every one of your debts will be gone if you decide to go with Chapter 7. Any ties that you have with creditors will be dissolved. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Research both types of bankruptcy online, and weigh the positives and negatives each would offer you. Ask your bankruptcy lawyer to clarify anything you don’t understand before making a final decision about which type of bankruptcy to file.
Don’t isolate yourself from family and friends. Going through a bankruptcy is never easy. This long and stressful process can leave a person feeling guilt ridden, unworthy and ashamed. Many people tend to hide until their process is completed. However, this isolation will just make you feel worse, and it could cause you to be depressed. Make it a point to catch yourself if you feel yourself pulling away from others. Tell others that you would like to do some enjoyable things together while you go through bankruptcy process, then do it.
Interest Rates
Filing for bankruptcy should not be done on a whim. 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. A good lender will be able to assist you in a variety of ways, from getting rid of your late charges to reducing interest rates. You may even be able to get a loan extension, giving you the extra time you need to pay your debt off. Making arrangements with the creditors to make reasonable payments towards you debt is a much better plan than bankruptcy because the lender simply wants the loan repaid.
After considering all of your options, you may find that bankruptcy is your only choice. Don’t carry the weight of the world on your shoulders. If the circumstances that brought you here were not within your ability to control, let go of the stress and guilt associated with them. You may be better prepared for the bankruptcy process after you’ve taken taken a look at this article.
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