If you have accumulated a lot of debt and are about to file for bankruptcy, let go of your worries. Do not worry, there are actually ways around filing bankruptcy. Make sure you thoroughly read the literature below in order to learn what you can about bankruptcy.
Lots of people have to claim bankruptcy when their bills are larger than their income. If you find yourself needing to file for bankruptcy it is important to familiarize yourself with the state laws. Each state has their own bankruptcy laws. Some states may protect you home, and some may not. It is best to become familiar with your state’s laws regarding bankruptcy before you take the steps to file.
Make sure that you understand everything you can about personal bankruptcy by visiting websites that offer information. The United States DOJ, the NACBA, and the ABI all have useful information. Knowing is half the battle, after all, and these websites are the first step in learning what you need to know to make your bankruptcy smooth and stress-free.
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. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Remember that if you can discharge the tax you can discharge the debt. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. Remember that if you hide your valuable assets or income from your bankruptcy trustee, you may risk a number of penalties and complications. Among these is the possibility that you could be blocked from ever filing again.
You must be entirely candid when it comes to declaring assets and obligations in your bankruptcy petition. Wherever you file, that court has to be made aware of all details regarding your finances, positive and negative. Don’t hold back information and create a strategy so you can deal with what’s really happening.
Meet with a few attorneys who offer free consultations before hiring one. Be certain that the person you meet with is really a lawyer. Avoid meeting with paralegals or legal assistants because they cannot give you legal advice. Interviewing multiple attorneys is a good way to find the best fit.
If your earnings are higher than your expenses then filing for bankruptcy is a waste of time and money. Though bankruptcy may appear to be a good way to escape your debts, it does affect your credit negatively for a fairly long time.
Chapter 7
Before you decide to file for Chapter 7 bankruptcy, you should consider what your bankruptcy might have on others, as your family and friends may be affected. You can relieve yourself of any liability for debts that you may share with someone else through a Chapter 7 filing. Your creditors can then come after your co-debtor for full repayment of the debt.
During a Chapter 13 bankruptcy, you may still be able to get a mortgage or car loan. However, it will be a longer and more arduous task. You will need to go through various hoops in order to be approved for any new loan type. Create a budget and prove you can afford a new loan payment. You should also be prepared to explain why you need to purchase the item.
When you are going through bankruptcy proceedings, it is sure to cause a great deal of stress. Working with a good bankruptcy lawyer can help make the process a lot smoother and less stressful for you. Do not let price be the only factor. Think about quality rather than cost when hiring an attorney. Make sure that you verify their reputation through various sources including people in your circle of friends and the BBB. Try to get a referral from a trusted friend or family member.
If you are considering bankruptcy, do not leave it until the last possible moment to do so. Often, people try to act like they are not in financial straits. They imagine the issues will blow away, but they do not. Personal debts can spiral out of control very quickly, and if you don’t take care of them, you may find yourself facing foreclosure or wage garnishment. As soon as you discover your debt is getting too big, immediately get hold of a bankruptcy attorney so that you can talk to him or her about your options.
Lots of individuals who previously filed bankruptcy vow to shun the use of credit cards or lines of credit in the future. This isn’t necessarily a good strategy to follow since establishing good credit goes hand-in-hand with getting, and handling, credit in a responsible manner. You have to reestablish your credit once you hurt it, this way you can still position yourself to take out things, such as home or car loans, in the future. You can start building up a more responsible credit history by opening one credit card account.
When filing for bankruptcy, make sure that you hire a lawyer to represent you. The job of a bankruptcy lawyer is to clarify your need to file, stand with you before the court and make the process easier. Your lawyer could also help you with filling out paperwork and can also teach you how to answer questions.
If you plan correctly, you can position yourself well. Any steps you take that give you additional time to address your debts are good ones. Every little bit helps when you are working to get out from under the threat of bankruptcy. Once you have a plan, you’ll be ready for whatever happens.
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