Bankruptcy can be stressful and it can also bring relief. The negative is that you will have to allow others to delve into your personal financial situation, and be open to it. The relief is that your phone will stop ringing with harassing phone calls from debt collectors, and you can begin to rebuild your credit. This article is filled with useful tips to help you get through bankruptcy.
Bankruptcy Laws
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. If you’re in this position, it is a good thing to familiarize yourself with the laws that apply in your area. Bankruptcy laws vary from state to state. For example, the personal home is exempt from being touched in some states, but not in others. See to it that you understand the bankruptcy laws in the area that you live prior to filing.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. If the tax can be discharged, so can the debt. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
When it gets time to think about bankruptcy, avoid using your retirement or savings to pay off the creditors or even make attempts to settle the debt. Avoid touching your retirement accounts whenever possible. Using your savings is necessary, but decimating it and leaving yourself dangling with no future financial security is not a good idea.
Determine which assets won’t be seized before filing for bankruptcy. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. It is vital that you know the things on this list prior to filing for bankruptcy, in order to determine which of your possessions will be taken away. If you fail to go over this list, you may be unpleasantly surprised sometime down the road if any of your most valued items are seized.
Before filing for bankruptcy ensure that the need is there. Consider whether debt consolidation may be a more viable alternative. The bankruptcy process takes forever to finish and is very nerve-wracking. Credit will be much harder for you to come by after you file for bankruptcy. You have to make certain that you absolutely have no other choice.
If you are making more money than you owe, bankruptcy should not even be an option. Although bankruptcy might seem to be an easy way of being able to pay for your debts, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.
Debt Repayment
There are many ways to resolve financial difficulties other than bankruptcy, and you should investigate all of them first. Ask a bankruptcy lawyer if a debt repayment plan or rate reduction would be of benefit. If foreclosure looms, think about getting your loan plan modified. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. Creditors want to recoup the most money possible from debtors, and they can often get more through debt repayment plans than bankruptcy procedures.
Once your initial filing is complete, it is time to take some time to relax a little. The filing process is extremely stressful for a lot of the people who go through it. This stress may lead to something worse like depression, so do what you can to fight that from happening. Your life will see improvement after you get past the bankruptcy.
Make sure that you disclose every bit of financial information on your bankruptcy petition. If you don’t do this, your file could be delayed or dismissed. No sum is too small to be included; err on the side of caution and include everything. Current loans, second jobs and assets ought to be included.
Prior to filing, do not use your credit card to get a cash advance, knowing your debts will be eliminated. 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.
Be mindful of paying off outstanding obligations before you file a bankruptcy petition. There are many laws when it comes to bankruptcy, including prohibition of paying some creditors 90 days before you file, as well as family for a whole year. Know the rules before you jump in feet first.
Do not take too long deciding that it is time to declare bankruptcy. It can be difficult to ask for help, but as you wait, you accrue more debt. By consulting a professional, you will be able to get the advice that you need before everything gets too complicated.
When filing for bankruptcy, make sure that you hire a lawyer to represent you. In addition to providing you with advice, they can appear in court for you and make the whole process easier. You lawyer can also help you fill out and file paperwork and answer all your questions.
Filing bankruptcy will always have good and bad sides. Doing some research is the best way to choose the most adapted solution. This article should help you learn more about personal bankruptcy. Utilize this advice, and you’ll discover that you’ll be feeling a lot better.
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