Bankruptcy is a tough decision for people to make, but in many situations, it is the correct choice. This situation is handled best when you know what to expect and have information about what to do. Continue to read this article to learn what has helped others who have filed for bankruptcy.
Millions of Americans file for bankruptcy each year because they can not pay their bills. If you have unmanageable debt, you need to familiarize yourself with regional bankruptcy laws. You will find that each state has their own bankruptcy laws. Some states protect your home, and others do not. Be aware of bankruptcy laws before filing your claim.
Make certain that you comprehend everything regarding personal bankruptcy by studying online. The United States Justice Department, the ABI (American Bankruptcy Institute), as well as the NABCA (National Assoc. Consumer Bankruptcy Attorneys) are excellent sources of information. As with everything in life, the more you know about filing a claim, the better off you’ll be. You can properly prepare when you know what you’re preparing for.
Credit Card
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. Do not hide any income or assets or go on a spending spree before filing for bankruptcy: the court will find out and will not have a positive opinion of you.
Be sure to hire an attorney before you embark upon filing for personal bankruptcy. Having a lawyer on your side is the best way to avoid mistakes and bad decisions. A personal bankruptcy attorney can help and guide you along through the bankruptcy process.
Speak to a bankruptcy attorney about what new laws may be going into effect before your bankruptcy filing. Bankruptcy law evolves constantly, and it’s important to stay up-to-date to ensure that you file properly. To know what these changes are, go to your state’s website or contact the legislative offices.
Chapter 13 Bankruptcy
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. In Chapter 7 bankruptcy, your debts are all eliminated. All of your financial ties to the people you owe money to will disappear. With a chapter 13 bankruptcy, a 60 month period of time will be established in which you will repay the as much of your debt as possible. Following the 60 month period of time, the remainder of your debt will be excused. To make the wisest choice, you will need to understand the consequences of each of these two options.
Safeguard your most valuable asset–your home. Just because you’re going bankrupt doesn’t mean that you also have to be homeless! If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
If you are making more money than you owe, bankruptcy should not even be an option. It can seem like bankruptcy can be an easy way to avoid paying back your debts, however it leaves a serious mark in your credit report that can last between seven and ten years.
Chapter 7
Think about any co-debtors you have prior to filing for Chapter 7 bankruptcy. Once you have filed Chapter 7, you, by law, are not responsible for any of your debts that also include your co-debtor. This does not dissolve any co-signers of the debt, and your creditors will continue to try and collect from them.
You do not need to lose all your assets just because you file for bankruptcy. Most of the time, you retain your personal possessions. Items like clothes, electronics, household furnishings, and jewelry are included in that category. The laws of your state and the kind of bankruptcy for which you are filing, coupled with your financial situation, will determine what personal property you are allowed to retain. Additionally, the retention of large assets, such as your automobile and your home, is determined by these considerations.
Nobody wants to file for bankruptcy, but in some cases the situation becomes necessary. After reading these tips, you can go through the process with some helpful tips. You will find that every journey in life goes more smoothly if you heed the advice of those who go before you, and this one is no different.
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