If the IRS or your other creditors are on to you about the money you owe, you should consider filing for bankruptcy. Of course your credit will be hurt when you file for bankruptcy, but sometimes this is your best choice. Keep reading to gain a better understanding of the bankruptcy process and of the ramifications of initiating a filing.
If you are feeling like you are seriously going to have to file for bankruptcy then do not clear out your savings. No matter what you do, do not touch your personal savings unless there is no other option. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. Do not try to shield some assets or income from your creditors. This can get you in serious trouble and prevent your bankruptcy petition altogether.
Unsecured Credit
Getting unsecured credit post-bankruptcy will likely be difficult. If that’s the case, it is beneficial to apply for one or even two secured cards. This at least shows you are making an honest attempt at reestablishing your credit worthiness. Unsecured credit may be offered to you quicker than you think after doing so.
If you can, get a word-of-mouth referral for a lawyer. To handle your bankruptcy, you need a trusted attorney, not a shady one that is out to take your money.
It is important to understand your rights when filing bankruptcy. Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. You should be able to get your possessions back if they have been taken away from you within 90 days before you filed for bankruptcy. Consult with a lawyer who can help you along with filing the petition.
Before declaring bankruptcy, ensure that all other options have been considered. For example, consumer credit counseling services can often help you figure out a workable repayment plan with creditors. You may also find success in negotiating lower payment arrangements yourself, but be certain to get any arrangements with creditors in writing.
Don’t file bankruptcy if you can afford to pay your debts. It can seem like bankruptcy can be an easy way to avoid paying back your debts, however it leaves a serious mark in your credit report that can last between seven and ten years.
See if your attorney can help you lower your payments if you want to keep your vehicle. Chapter seven bankruptcy often provides for the lowering of payments. The requirements are that your car purchase has to be greater than 910 days before filing, must have a loan that is high in interest, and must have a solid work history.
Chapter 7
Before you decide to file for Chapter 7 bankruptcy, consider how it could affect other people on your credit accounts, such as family members or business partners. When filing Chapter 7, you are not legally responsible for the debts in your name. Although, your creditors may insist that the co-debtor pay off the entire debt.
Make certain that you are fully aware of each and every bankruptcy law prior to even considering filing. You should not transfer your assets to anyone in the year preceding your bankruptcy filing. Moreover, a filer is prohibited from spending or incurring extra debt prior to their bankruptcy filing.
Be mindful of paying off outstanding obligations before you file a bankruptcy petition. There are bankruptcy laws which forbid repayment of some creditors within three months before filing. In the case of family members, this period of time may extend to a full year. Read the rules before making financial decisions.
Adopt a positive attitude toward filing for bankruptcy and researching the topic. Yes, it is hard to admit that you need help; however, the longer you wait the deeper in debt you get. Going to a lawyer as soon as you can is the best to remain in control of your situation.
Credit History
Before you decide to file bankruptcy, you should think of ways to become more financially responsible. Be certain not to incur extra debt or increase the amount of debt you already have. Judges may take into account your current credit history, in addition to your past credit history, when considering your bankruptcy case. You want to show them that you are doing everything you can to make your situation better.
Write down every debt you have. Be sure your list is complete as it will form the basis of your personal bankruptcy filing. Be sure you’re going through every record so you can be sure you’re getting the right amounts. It is important that you take your time here; you need to ensure your figures are correct if you want to get these amounts discharged.
Take the time to choose a good bankruptcy lawyer. Because of the increase in bankruptcy filings, this field attracts a lot of newer, inexperienced attorneys. Before hiring a lawyer, make sure he or she is licensed and experienced. Use the Internet to look at lawyer’s disciplinary records, background, and client ratings.
As stated previously in this guide, personal bankruptcy can always be an option. However, it has detrimental effects on your credit, so this should not be your first choice Learning how to manage this situation can minimize your headaches and prevent repossession of valuable property.
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