Just thinking about bankruptcy can frighten people. Rising levels of debt, paired with an inability to care for their family is a vivid nightmare for certain folks. If this troubles you, or if you are dealing with this nightmare now, the following information is required reading.
Be certain you understand all you can about bankruptcy by researching reputable sites that offer good information. Many sites, including the U.S. Department of Justice, NACBA, and American Bankruptcy Institute websites are all great places to go for up-to-date information. The more you know, you can be confident you are choosing the right thing and that you are taking the right road to make sure your bankruptcy proceeds as easily as possible.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Exhaust every other option before making the decision to file for personal bankruptcy. Other available options include 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.
The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. Not hiding any assets or income is essential for avoiding possible penalties and your ability to re-file at some point in the future.
Prior to filing your bankruptcy petition, go over the list of assets that cannot be seized by creditors. The Bankruptcy Code has lists of various asset types that are exempt during the process. 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. Failure to do this could cause some ugly surprises down the road when you discover that your valuables must be seized.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Take the time to find out about each one online, and look at the advantages and disadvantages of each. Do not hesitate to have your lawyer explain any details that seem difficult to grasp. This will help ensure you make the right choice when filing.
Don’t file for bankruptcy unless it’s absolutely necessary. Consolidating current debt could make it easier to manage. The bankruptcy process takes forever to finish and is very nerve-wracking. You should be aware that there are some negative ramifications to it, like extreme damage to your credit score. Therefore, you must make sure that there is no other option that you could take before you file for bankruptcy.
If you are making more money than you owe, bankruptcy should not even be an option. Bankruptcy might seem like a good way to get out of paying your bills, but it will devastate your credit for the next ten years.
Take into consideration all the ramifications of a Chapter 7 bankruptcy. Filing for this can impact any co-debtors, such as friends or family. You may have your responsibility for your portion of the loan discharged under Chapter 7. Your creditors can then come after your co-debtor for full repayment of the debt.
You can still take out a car loan or mortgage while you are in Chapter 13 bankruptcy. However, the process of approval is a bit more stringent. You have to meet with your trustee to get approval for the new loan. Draw a budget up and show how you can pay the newer loan payment. You should also be prepared to explain why you need to purchase the item.
Be aware of the fact that you may be under a great of stress while you deal with your bankruptcy. To help yourself deal with this stressful situation, make sure you hire a legitimate attorney. Don’t make your choice to retain a particular lawyer simply because they are the cheapest. Your lawyer does not necessarily have to be the most expensive one; however, you should be certain of his or her qualifications and abilities. Rely on word-of-mouth referrals from others who have filed for bankruptcy, check the BBB, and take advantage of free consultation offers. If you wish, you can attend a bankruptcy hearing and witness your attorney in action.
Before filing for bankruptcy, you must be educated on the specifics of all bankruptcy laws. For instance, you need to know not to shift assets into someone else’s name in the year leading up to your filing. Other laws you need to know include debt-based regulations. You cannot increase debt via credit cards prior to filing a claim. Your finances basically have to remain frozen.
It’s normal for people to be scared of bankruptcy, since it really is a frightening process. Don’t let your fear take over. You now have the knowledge necessary to overcome the fear. You can improve your life and safeguard your family by following the personal bankruptcy advice presented here.
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