Personal bankruptcy can always be an option for people that have had items, like vehicles, repossessed by the IRS. Your credibility with lenders will take a beating, but sometimes bankruptcy is the only thing you can do. The following article will provide some basic information about filing for bankruptcy and its possible consequences.
It is simple math; when you owe more than you are able to pay off, a bankruptcy is the likely solution. If this is your case, you should do some research about bankruptcy laws in your state. Bankruptcy rules vary by jurisdiction. For instance, your home might be protected in some states while you might lose it in others. Be aware of bankruptcy laws before filing your claim.
If filing bankruptcy is in your future, don’t waste any savings you may have attempting to pay off your debts. You should not use your retirement savings unless the situation calls for it. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
It is essential that you are honest and forthright in the documentation you provide for your bankruptcy filings. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
Don’t be afraid to remind your attorney of certain details in your case. Inaccurate or incomplete information can lead to your petition being denied. Speak up if something is troubling you, as this is your future we are talking about here.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. To handle your bankruptcy, you need a trusted attorney, not a shady one that is out to take your money.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. The Bankruptcy Code provides a listing of the various asset types that are not included in the bankruptcy process. It is vital that you completely understand which assets are protected and which assets can be seized prior to filing bankruptcy. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
Chapter 13
Consider Chapter 13 bankruptcy. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. Not only can you repay your debts through consolidation, personal property can be kept, as well as real estate. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
Do not let bankruptcy consume you, make sure you make time for your friends and family. Bankruptcy proceedings can be extremely harsh. It is long, full of stress and leaves individuals having feelings of shame and guilt. It is not uncommon for a person to feel the need to pull away from loved ones during the process. Do not isolate yourself or you will put yourself at risk for depression. It’s imperative that you spend as much time with loved ones as you can, even in the midst of your financial dilemma.
Before declaring bankruptcy, it is important to know your rights. Bill collectors can try to scare you into believing that your debt will not be cleared. Only a small number of debts are not dischargeable, including student loans and child support obligations. 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.
As mentioned earlier, there is always the opportunity to file for personal bankruptcy. That said, you should think twice before filing, since it leaves a huge black mark on your credit. Don’t sit back and let the process take control of you. Take control of the process by doing your research so that you don’t lose more than you need to.
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