There are quite a number of people who have been affected by the economy, and now find themselves buried in debt. If you are in this situation and do not take take action, things will only get worse as collection agencies try getting their money. You may have found yourself in the same situation, and you should know that bankruptcy could be a good option for you. Read the following paragraphs to decide if this path is one that you should take.
When people owe more than what can pay, they have the option of filing for bankruptcy. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. Laws differ from one state to the other. For instance, some states protect you from losing your home in a bankruptcy, but others do not. It is important to be cognizant of the laws in your state before filing for bankruptcy.
Credit Cards
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. The lawyer who properly answers your questions is the one you should hire. You don’t need to decide what to do right away. After your consultations, do some additional research on each attorney you consider qualified for the job.
Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. Never settle for speaking with a paralegal or an assistant. They are not trained, nor allowed, to pass on legal advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Read up on the topic and familiarize yourself with the benefits and drawbacks of both variations. If you have trouble understanding the wealth of information, talk to your lawyer so he or she can help you make an informed choice.
Determine if bankruptcy is necessary. You might be better off consolidating your debt or availing yourself of some other remedy. Bankruptcy is a long process that can be stressful. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. Therefore, before you file for bankruptcy you need to consider all of your alternatives.
While going through this process, spend more time with friends and family. Bankruptcy proceedings can be extremely harsh. It can be long and drawn out which adds lots of stress and leaves people feeling empty inside. Most people adopt a very negative attitude toward bankruptcy. Self-imposed isolation can make you feel worse about it and can cause depression. Time spent with people who care about you can give you new perspective on your financial situation.
Be sure you’re acting when the time is right. Timing is very important when it comes to personal bankruptcy filings. There are situations in which it is in your best interest to file immediately, but other times it is advisable to wait. Find out when the correct time is for you to file for bankruptcy from a bankruptcy legal professional.
Filer Cannot
Do some research about bankruptcy laws before filing for bankruptcy. For instance, a filer cannot transfer assets to someone else for at least a year before filing. Not only that, but the filer cannot lawfully accrue additional debt just prior to filing.
Before filing personal bankruptcy, consider other options. One good option might be credit counseling. There are a number of companies that will assist you, many of which are non-profit. They’ll talk to creditors and strive to get both your payments and interest rates lowered. They pay your debts and you repay them.
You should now understand that there is more than one path to take when it comes to bankruptcy. You can have a brighter financial future by approaching the situation with a better understanding of the process and the right tools at your disposal.
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