Declaring bankruptcy is anything but easy. You need to know what type of bankruptcy you should file for based on your current finances and the type of debt you have. Prior to filing, there is a lot you need to know. This article has information that can help you.
A lot of people find themselves needing to file bankruptcy when they are unable to pay their bills. If this sounds like you, start familiarizing yourself with your state laws. You will find that each state has their own bankruptcy laws. In a few states, they see to it that your house is protected. This is not the case when it comes to other states. Familiarize yourself with the bankruptcy laws of your state prior to filing.
Do not use a credit card to manage your tax issues and then try to file bankruptcy. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. The rule here is that if you can get the tax discharged then you can get the debt discharged. This means using a credit card is not necessary, when it will just be discharged.
When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. Some companies just want to take advantage of you, so it is important that you have help from someone you trust.
Protect your house. Bankruptcy doesn’t always mean you’ll lose your home. You might be able to keep your home, for instance, if you have two mortgages or if your home has lost its value. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
Know and understand the difference between filing for Chapter 7 bankruptcy versus Chapter 13 bankruptcy. Take time to research this online and see the pros and cons for filing each one. If anything you see is unclear or doesn’t make sense, go over it again with your attorney before making the final filing decision.
Remember to only file for bankruptcy if you need to. Consolidation could be the avenue you need to get your finances back in order. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. Having a bankruptcy on your record will hinder your ability to get credit in the future. Because of this, filing for bankruptcy should only be used as a last resort.
Make time to visit with family and friends during the bankruptcy process. Undergoing bankruptcy can be a difficult experience. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. A lot of people hide away until the entire proceedings have been played out. This is not recommended because you will only feel bad and this may cause you to feel depressed. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
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. Once you have filed Chapter 7, you, by law, are not responsible for any of your debts that also include your co-debtor. Creditors, however, will hold the co-signer liable for the entire balance of the debt.
Financial Information
Make a comprehensive list of all of your financial information before you file for bankruptcy. Failing to disclose all of your financial information can cause your bankruptcy petition to be dismissed, or, at the very least, delayed. You might think some asset or debt isn’t worth bothering with, but you should disclose it just to be on the safe side. This includes any jobs you have on the side, any vehicles you have and any outstanding loans.
Make sure you know what you should be doing when you file for bankruptcy. There are a lot of pitfalls in the personal bankruptcy code that could lead to issues with your case. Some mistakes can even lead to your case being dismissed. This is exactly why it’s imperative that you take the time necessary in order to research what you can about bankruptcy. This will make things a lot more simple in the long term.
Consider any other options available before filing for personal bankruptcy. Think about seeing a credit counselor. A number of non-profit companies can assist you. They can work with the creditors to lower payments and interest. You make payments to them and they pay your creditors.
Before filing for bankruptcy, it is important to still be smart with your finances. Don’t boost current debt or get new debt before bankruptcy. Determinations on whether to grant a bankruptcy are made after looking at your entire record; current history in addition to past issues. Even though you may have found yourself in a bind, you want to show them that you are trying to make serious efforts to stabilize your finances.
Rethink a divorce when in a tough spot with finances. Many people find themselves filing for bankruptcy after a divorce. It is never foolish to think twice about seeking a divorce.
You likely now understand that bankruptcy is something that should be undertaken carefully and with great deliberation. If you decide bankruptcy is right for you, take the proper precautions. This could be a new beginning and a clean slate for you.
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