These days, the word “bankruptcy” is about as common as the word “the.” Sustained unemployment has led many people to file bankruptcy recently. Just because it’s more commonplace doesn’t make it simpler, however. So before you decide to file a claim to get out of debt, you first need to ensure that you understand the implications of the entire process. The following tips are going to help clarify some bankruptcy confusion for you.
Do not use a credit card to pay income taxes and then file for bankruptcy. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. Remember that if you can discharge the tax you can discharge the debt. It is pointless to use credit cards if they can be discharged.
When you document your financial records, it is vital that you are 100% truthful in order to have a successful resolution to your bankruptcy process. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
Make sure you keep reminding your attorney about any important details in your case. Just because you have told him something of importance that he will remember it. It’s your financial future that is in his hands; don’t hesitate to speak up.
Research what assets are exempt from seizure before you decide to declare bankruptcy. Check the bankruptcy laws in your state to find out if certain items are excluded from your bankruptcy filing. You can determine exactly which of your possessions are at risk by consulting this list before you file. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
Never pay to have a consultation with a lawyer, and ask a lot of questions. Most lawyers offer free consultations, so talk to a few before making your decision. Make a choice only if you have received good answers to all the questions and concerns you brought to the table. You do not have to give them your decision right after the consultation. You have lots of time for consulting with other lawyers.
Investigate any new laws before deciding to file a bankruptcy. If you want to file for bankruptcy successfully, it’s important to review the latest applicable laws. They tend to change frequently. To learn how the law has changed recently, go online and check your state’s website, or call the state government and ask them.
Many bankruptcy lawyers offer free consultations, so go to several before choosing one. Be certain to speak with an attorney, not their paralegal or law clerk, since they cannot give legal advice. Take some time to talk to different lawyers to find one that fits your needs, and meshes well with you.
Because of the comes from bankruptcy, you may feel overwhelmed and stressed. The best way to lessen this stress is to employ a lawyer, who can handle most of it for you. Don’t think that the highest priced attorney is the best. The cheapest attorney may not be the best, but the most expensive may not be the best either. Ask people who have used a bankruptcy lawyer for referrals, look them up at your local Better Business Bureau, then schedule free consultations in order to interview them. Often, watching a bankruptcy proceeding can give you clues to the quality of a lawyer.
Do not omit any information about your finances, assets or debts when filling out your bankruptcy paperwork. If you do not complete your financial profile your case could be delayed or dismissed. No sum is too small to be included; err on the side of caution and include everything. This includes income from second or part time jobs, vehicles and loans.
Don’t take out big cash advances from any of your credit cards prior to filing for bankruptcy, taking advantage of the fact that those debts will later be erased. Doing so, is a type of fraud that may result in your having to pay back all money advanced from credit card accounts in the months just prior to your bankruptcy.
Watch how debts are paid off prior to filing. You may find that bankruptcy law prohibits you from paying back some types of creditors for 90 days before you file, and a year for family members. Find out more about legal requirements before making your decision.
Don’t take too long when trying to decide whether you want to file bankruptcy. Filing for bankruptcy is a hard decision to make but if you wait too long, your situation will get worse. If you talk to a financial professional, they can assess your situation and give you suggestions on what could solve the problem.
As previously noted, bankruptcy is very common today, particularly because of the current economy. So, use what you learned today so that you know what decisions to make while you contemplate filing for bankruptcy.
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