As you probably know, the economy is in the toilet. The cycle of a tough economy leads to people losing jobs and going into debt. Too much debt leads to bankruptcy, which can be an extremely traumatic experience. If a family member or a loved one is on the verge of filing for bankruptcy, the following article can help you understand more about the process and whether it offers an appropriate solution.
You should check with the personal bankruptcy resources available online to educate yourself thoroughly before you begin the process. The United States The Department of Justice is just one resource of information available to you. Knowing as much as possible about bankruptcy gives you an advantage and will help you make the best decision possible.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
Ask yourself if filing for bankruptcy is truly your best option. You have other choices, including consumer credit counseling. Your credit record will be harmed by a bankruptcy filing, and therefore prior to making such a decision, it is wise to investigate other options in order to minimize the damage you suffer.
Retirement Funds
When bankruptcy seem inevitable it is important not to use your retirement funds or emergency savings to pay creditors. Retirement funds should be avoided at all costs. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
It is essential that you are honest and forthright in the documentation you provide for your bankruptcy filings. Do not try to shield some assets or income from your creditors. This can get you in serious trouble and prevent your bankruptcy petition altogether.
Try to find a bankruptcy attorney who is personally recommended, rather than off the Internet, or out of the yellow pages. You want your bankruptcy to go smoothly, and the Internet is rife with fly-by-night companies whose only goal is to prey upon the financially desperate.
Before filing for bankruptcy, hire a qualified attorney. It is unlikely that you will be able to comprehend all the various rules and regulations involved in bankruptcy law. A bankruptcy attorney can help yo,u and make certain you can do things the right way.
Meet with a few attorneys who offer free consultations before hiring 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.
Put forth the effort to grasp the distinctions between Chapter 7 and Chapter 13 bankruptcies. By researching each type, you can begin to understand which method is right for you. If you don’t understand the information you researched, consult with your attorney about the details before you decide which type of bankruptcy you want to file.
Chapter 7 Bankruptcy
Keep in mind that filing for Chapter 7 bankruptcy may affect other people than just you, including family members, and in some cases, business associates. Once you complete a Chapter 7 bankruptcy, you will be free of any responsibility of debt, which could put all responsibility on someone close to you. However, your creditors will be able demand that your co-debtor pays the debt off in full.
Whenever you file a petition for bankruptcy, do not leave out any information about your finances or assets. Leaving out information either purposely or by mistake can prolong your petition, or have it dismissed completely. Even if it’s a small sum, make sure it is listed. Include all jobs, assets and loans.
Make a detailed list of the debt that you have. Only the debts you list on your bankruptcy filing will be discharged, so make sure all of them are included. Include your exact balance on each account. Don’t do this process too fast because these amounts won’t get discharged if the numbers aren’t right.
Be certain to create a list that displays all the debts you want discharged when you file. If you don’t include all your debts, the ones you leave out won’t be covered by the bankruptcy. You must ensure that all essential data is recorded in order to guarantee that every debt is included in your discharge.
If you find a job right before filing your bankruptcy papers, and finally have a steady income, you may still want to file for bankruptcy. Filing for personal bankruptcy may still be the best idea even in their current circumstances. The timing of your bankruptcy is a big deal. If you file your bankruptcy before you receive new income, your ability to repay will be evaluated as if you did not have a job.
Some attorneys offer a phone service for free where creditors will be referred to when they wish to contact you regarding an account that’s delinquent. You can just give them the number and they can call for confirmation that your debt is indeed part of a bankruptcy. Then they should not need to call you again.
The economy is showing signs of recovery, but unemployment and underemployment are still high. If you are lacking a steady income, and are facing mounting bills, there are still steps you can take to help avoid bankruptcy. Hopefully this article has provided you with some tips to keep yourself, or someone else, from having to file for bankruptcy. May good fortune be with you.
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