Coping with the realization that you have to file bankruptcy is not any easy thing to do. When you find yourself in a financial bind, you realize that your options are limited. But remember that there is always a way out of a situation you are in, so do not let bankruptcy scare you.
Millions of Americans file for bankruptcy each year because they can not pay their bills. When you are faced with this issue, begin to familiarize yourself with your state’s laws. You will find that each state has their own bankruptcy laws. For example, the personal home is exempt from being touched in some states, but not in others. Be sure to have some familiarity with the law in your jurisdiction.
Credit Card
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. 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.
Always be honest and forthright when it comes to your bankruptcy petition. You might feel tempted to not declare certain assets in your bankruptcy in order to protect them from forfeiture, but if you’re found out, the process could take longer, or worse, you might be banned from filing for bankruptcy completely.
Be as honest as you possibly can when filing for bankruptcy; hiding liabilities or assets will only hurt you in the long run. Wherever you file, that court has to be made aware of all details regarding your finances, positive and negative. Telling the truth will allow you reach a solution that is feasible, given your current situation.
Before you file for personal bankruptcy, be sure that you are cognizant of all current laws. Bankruptcy laws constantly change and it’s crucial you know about them so you the process of filing for bankruptcy goes smoothly. To learn about these changes, try contacting your state’s legislation office or checking their website.
Chapter 7 Bankruptcy
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. This type of bankruptcy ends any relationship you might have with creditors. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.
Many bankruptcy attorneys offer the first consultation with no charge, so consult with several before deciding on one. Never settle for speaking with a paralegal or an assistant. They are not trained, nor allowed, to pass on legal advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
You can take out a mortgage or car loan while filing Chapter 13 bankruptcy. This is a lot harder. You will have to see your trustee and the approval for this new loan. Create a budget and prove you can afford a new loan payment. You will also need to explain why it is necessary for you to take out the loan.
Going through bankruptcy is tough and can be mentally and emotionally draining. Engage a competent lawyer in order to avoid excess stress and keep everything on track. Be sure that you consider more than the expense when you choose a lawyer. Your attorney does not need to cost a lot, but they do need to have a lot of experience. Get referrals from people you know who have been in your situation, check with the better business bureau and use free consultations to interview several people. When looking at bankruptcy attorneys, consider sitting in on one of their court hearings to find out how they handle the case.
If you are in the situation to need to file for bankruptcy, this article has shown you that it is not the end of your life. By becoming financially responsible post-bankruptcy, you’ll be showing lenders that you’re serious about reestablishing your credit worthiness. Start now, and by the time you need a home loan or car, you may be able to get one.
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