If your car or other valuable items are about to be repossessed due to back taxes, you are probably quite afraid of what will happen. End calls from debt collectors and gain control over your finances by filing for bankruptcy. In the following paragraphs, you’ll find advice that will guide you through the bankruptcy process.
Personal Bankruptcy
Most people end up filing for personal bankruptcy because they owe more than they make. If this sounds familiar, you should read up on the bankruptcy laws in your state. Each state has its own laws regarding personal bankruptcy. For instance, in some states you can keep your home and car, while other states prohibit this. Familiarize yourself with the bankruptcy laws of your state prior to filing.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. Avoid touching your retirement accounts whenever possible. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. 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 persistent in researching information about filing for bankruptcy and consult a qualified personal bankruptcy attorney. Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. Any property repossessed within 90 days before filing bankruptcy, may be able to be returned to you. Consult with a lawyer who can help you along with filing the petition.
Free Consultations
Find a bankruptcy attorney who offers free consultations, and ask lots of questions. Since most attorneys offer free consultations, meet with a few attorneys before deciding who to hire. Only make your decision if all your questions and concerns are adequately addressed. Take your time choosing the right attorney to assist in your bankruptcy. This allows you time to speak with numerous lawyers.
Safeguard your home. Filing bankruptcy does not necessarily mean that you will lose your house. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. You are still going to want to check into homestead exemption either way just in case.
Look at all the alternatives to bankruptcy before filing. 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. If you are facing foreclosure, consider a loan modification plan. Lenders can assist you in a lot of ways, by cutting interest rate charges and cutting off late fee charges. They can also lengthen the loan. When all is said and done, creditors want their money and find repayment plans preferable to not getting paid at all.
Remember that filing for Chapter 7 personal bankruptcy will not just affect you. Think about the effect it will have on business associates, friends and family or anyone else who may be a co-signer with you. When filing Chapter 7, you are not legally responsible for the debts in your name. However, creditors can demand co-debtors pay the amount in full.
If you are considering bankruptcy, do not leave it until the last possible moment to do so. Some people will just ignore their outstanding debts, hoping that someone or something will come and save them, but this never ends well. All your personal debts will easily go haywire, building and collapsing very quickly. This often leads to foreclosures and garnishments. The minute you realize that your debts are too big to take care of, contact a bankruptcy attorney to discuss your options.
After going through bankruptcy, a lot of people think they are being financially responsible if they shun all forms of credit. However, building a good credit history requires that you occasionally use credit. Avoiding credit altogether prevents you from rebuilding your credit standing, and will therefore serve as an obstacle when you wish to finance a house or a vehicle. You can rebuild your credit slowly, beginning with just one credit card.
Before you file, make the choice to be fiscally reliable. Don’t go on a spending spree or increase your debt right before you file. The courts and your creditors will be looking at your current, as well as past, credit history when adjudicating your bankruptcy. Show that you are making a positive change to your current financial situation.
While personal bankruptcy can always be an option, don’t do it before looking at other options. Also keep in mind many debt counselling companies are scams that can get you further into debt. Use the tips you learned from this article to improve your financial situation and stay away from debt.
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