Just thinking of filing for bankruptcy can scare a person. Growing debt, along with insufficient income to support a family, can make life seem unbearable. If these circumstances sound familiar, you stand to benefit from the tips that follow.
Make sure that you understand everything you can about personal bankruptcy by visiting websites that offer information. The United States DoJ along with other private and nonprofit organizations all have insightful knowledge. You will find that the process of filing for personal bankruptcy is easier and less of a hassle with the more information on the subject you gather ahead of time.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. In most states, this is not dischargeable debt. Therefore, you will end up owing 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 using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
If you are planning to file for bankruptcy, be sure to learn what types of assets you will be able to keep and which can be seized. Certain assets, as listed in the local bankruptcy regulations, are immune from seizure during bankruptcy. It is important that you read this list before filing for bankruptcy, so that can find out whether or not your most prized possessions will be seized. Failure to do this could cause some ugly surprises down the road when you discover that your valuables must be seized.
If you are about to file for bankruptcy, then make sure you hire a lawyer. You may not know everything you need to know in order to have a successful outcome of your case. When you engage the services of a bankruptcy lawyer, you can be assured of getting the help your need to proceed correctly.
Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. Bankruptcy law has changed substantially in recent years, and therefore you must understand how such changes may affect your situation. To find out about these changes, you can look at your state’s legislation website or contact their office.
Weigh all of your options before declaring bankruptcy. If your debt is relatively low, you may be able to manage it with credit counseling. Negotiating with creditors is another option, but creditors are notorious for “forgetting” these agreements, so get them in writing!
Chapter 13
Do some research to find out more about Chapter 13 and Chapter 7. Chapter 7 is the best option to erase your debts for good. This type of bankruptcy ends any relationship you might have with creditors. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. You must know about the different bankruptcy types, and how each can affect you.
Know your bankruptcy rights. Don’t take a debt collectors word for it simply because they tell you that you can’t have many or all of your debts erased by bankruptcy. Most loans can be discharged outside of certain things, like child support or loans you are paying back due to student lending. If you know that a debt can definitely be bankrupted, yet the collector still harasses you, file a report with the attorney general in your state.
Pick the right time to file. Timing is very important when it comes to personal bankruptcy filings. In some situations it is best to file as soon as possible, but in other situations it is best to wait until after you’ve gotten through the worst of it. Speak with a bankruptcy lawyer to discuss the proper timing for you to file bankruptcy.
Banish the word “shame” from your vocabulary before you file for bankruptcy. A lot of people have a negative opinion of bankruptcy, mostly because they misunderstand this procedure. Learn to accept these feeling at face value– you can’t prevent yourself from feeling them, but you can stop them from controlling you. Focusing on the positive during this stressful time is a good strategy for coping with your ordeal.
Know the bankruptcy code backwards and forwards before filing. For instance, somebody cannot transfer assets from a filer’s name up to a year after they file. Maxing out your credit cards immediately before filing is also illegal.
People who are afraid of bankruptcy have good cause to be; the process can be scary and stressful. Instead of living in fear, read this article for advice. Apply what you’ve learned here, and get a fresh start for you and your family.
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