The economy has been in a poor state for several years now. The cycle of a tough economy leads to people losing jobs and going into debt. Debts result in bankruptcy, which is never a good thing. When you or a loved one is contemplating bankruptcy, it is important to read the following piece in order to understand available alternatives.
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.
Exhaust every other option before making the decision to file for personal bankruptcy. You have other choices, including consumer credit counseling. Be certain that bankruptcy is the only option you have before pursuing this course because bankruptcy is always evident on your financial and credit history.
Don’t hide assets or liabilities when filing for bankruptcy. Good or bad, you must tell your bankruptcy attorney everything about your financial situation. Don’t hold back information and create a strategy so you can deal with what’s really happening.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Most lawyers provide a consultation for free, so consult with many of them before picking which one you want to hire. Don’t choose a lawyer until your questions about bankruptcy are sufficiently answered. It is not necessary to decide immediately after your consultation. That gives you the chance to speak to a number of lawyers.
Investigate any new laws before deciding to file a bankruptcy. Make sure to get the most up-to-date information concerning the bankruptcy laws in your state. To stay up-to-date on these laws, check out your state’s government website.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Take the time to learn about them extensively, and then figure out which one will be best for your particular situation. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
Chapter 13
You could see about filing for Chapter 13 personal bankruptcy. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. This repayment period usually lasts from three to five years. If you make your payments faithfully during that time, any remaining unsecured debt will be eliminated. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
Before ultimately deciding whether or not to file for bankruptcy, be sure to weigh the different options available to you. 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 foreclosure is imminent, see if your loan can be altered at all through a modification plan. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. Creditors would rather be repaid, however slowly, than have you declare bankruptcy.
Once your bankruptcy filing is under way, take the time to decompress a little. After filing, many people find themselves stressing over their situation and how to fix it. Don’t let the process control you in a negative way. You will get through it, and you should make an effort to remember that. Once the process is complete your life will improve.
Talk with your lawyer about getting lower payments for any car you wish to keep. In many cases, you can reduce your payment by filing a Chapter 7 petition. There are certain requirements and restrictions such as a loan that has a high interest rate, cars purchased 910 days before you file, and a steady job history that can help you keep your vehicle.
Before you decide to file, make yourself aware of the laws about bankruptcy. As an example, it is prohibited for someone to transfer assets from the filer’s name for one year prior to filing. It is also against the law to max out your credit cards before filing for bankruptcy.
Don’t take big cash advances off your credit cards in the days prior to filing for bankruptcy. To do this would be considered fraud. Even after filing for bankruptcy, you might be forced to repay money gained in this manner.
Don’t put off filing for bankruptcy until you are in dire straits. Filing for bankruptcy is a hard decision to make but if you wait too long, your situation will get worse. The time to seek out professional advice on bankruptcy is as early as possible. Your financial situation will get complex very quickly, so wise counsel is more valuable the earlier you get it.
Once a few months have passed after your bankruptcy, contact the three major credit reporting agencies and request copies of your report. Check that your reports accurately reflect all your closed accounts and discharged debts. If any discrepancies appear, check on them immediately. This will allow you to start fixing your credit.
Bankruptcy affects people from all walks of life. Even long-term job loss does not inevitably have to result in bankruptcy. This article has likely given you some ideas on how you can protect yourself from having to file for bankruptcy. May good fortune be with you.
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