It is not uncommon these days for people to be drowning in debt. The hate answering the phone because many debt collectors call daily, and every trip to the mailbox means another stressful bill. If you have been going through this for a while, you might want to consider filing for bankruptcy. To find out if filing for personal bankruptcy is the right thing for you to do, read on.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. 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. If the tax has the ability to be eliminated, the debt can be too. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Do not be afraid to remind your attorney of important specifics of your case. Do not assume that if you’ve already told him or her something important once, that they will remember it later without a reminder. Your case and future are affected by the attorney’s action, so never be afraid to communicate.
Once you file for bankruptcy, you will have a hard time getting loans or credits. Look into getting a secured credit card in order to get back on your feet with building credit. When you do this, it shows your determination to fix your credit history. Eventually, you could be able to obtain unsecured credit.
Research what assets are exempt from seizure before you decide to declare bankruptcy. The Bankruptcy Code contains a list of various assets that are excluded from bankruptcy. You need to read the exemptions for your state, so you know what property you can protect. You may find yourself unpleasantly surprised when the things you value the most are taken from you without warning. This is why it is very important the familiarize yourself with this list.
Hire a lawyer if you plan on filing for bankruptcy. Personal bankruptcies are detailed and complex processes, and you may miss something that costs you money. A bankruptcy attorney can help yo,u and make certain you can do things the right way.
Stay up to date with any new bankruptcy filing laws. It can be tough to keep up with them on your own, and because they change often, a bankruptcy attorney can help you keep track for the sake of your filing process. To stay up-to-date on these laws, check out your state’s government website.
Chapter 13
You could see about filing for Chapter 13 personal bankruptcy. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
After your initial filing, take time to enjoy yourself a bit and get your mind off of it. It’s easy to be stressed during this time. That stress can cause depression, if you don’t take care to avoid it. Remember that your situation is going to improve after you file for bankruptcy.
Before you choose Chapter 7 bankruptcy, think about what effect that is going to have on any co-signers you have, which are usually close relatives and friends. When you file under Chapter 7, you will no longer be legally responsible for any debts that were signed by yourself and a co-debtor. Your creditors can then come after your co-debtor for full repayment of the debt.
Know the rights that you have as you file for bankruptcy. Some bill collectors will tell you that your debts can’t be bankrupted. There are a few debts that cannot be cleared, such as student loans and child support, but be sure to know the details when dealing with debt collectors. If you are told differently by a collector, research the information yourself. If you find they are in error, get the name of their company, phone number and any identifying info so you can report it to the attorney general in your area.
You should now understand that there is more than one path to take when it comes to bankruptcy. If you approach this with a clear mind and in the right way, it can give you the debt relief that you have longed for and will enable you to get back on your feet.
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