Bankruptcy is very common in today’s economic climate. The economic downturn has played a large role. Before you choose to file for bankruptcy, it is important that you know the ins and outs of the subject, in order to ensure you make the best decisions. The following tips are going to help clarify some bankruptcy confusion for you.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. The rule here is that if you can get the tax discharged then you can get the debt discharged. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. Remember that if you hide your valuable assets or income from your bankruptcy trustee, you may risk a number of penalties and complications. Among these is the possibility that you could be blocked from ever filing again.
Be sure to bring anything up repeatedly if you are unsure if your lawyer is focusing on it. Chances are that you may have forgotten to tell them about certain specifics that may be important to your filing. Remember that you’re the boss. You’re paying your lawyer, so you should not be afraid to have your say. After all, the quality of your life hangs in the balance.
Unsecured Credit
You might experience trouble with getting unsecured credit after filing for bankruptcy. Look into getting a secured credit card in order to get back on your feet with building credit. By doing this, you will be letting people know that you want to fix your credit score. In time, you might be granted unsecured credit again.
If you are meeting with a lawyer to discuss bankruptcy, the initial consultation should be free so ask every question you have. Most lawyers offer free consultations, so talk to a few before making your decision. The lawyer who properly answers your questions is the one you should hire. It is not necessary to make a final decision right away. Take the time to meet with a number of attorneys.
Before declaring bankruptcy, ensure that all other options have been considered. For example, you may want to consider a credit counseling plan if you have small debts. It may also be possible to get lower payments, but if you do, be sure to obtain records for any consensual debt modifications.
A lot of bankruptcy attorneys will let you have a consultation, so try several out. Never settle for speaking with a paralegal or an assistant. They are not trained, nor allowed, to pass on legal advice. Searching for the best lawyer will help you located the comfort you need during this time.
You can take steps to hang onto your house. You don’t have to lose your home just because you are filing for bankruptcy. There are mitigating factors, such as lose of value, or multiple mortgages. If you’re not sure, however, you can always study the particular homestead exemption regulations. You will learn everything you need to know.
Unsecured Debt
Consider Chapter 13 bankruptcy, if you chose to file. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Bear in mind that if you miss a single payment that is due under your plan, the entire case will be dismissed by the Court.
Do not file for bankruptcy if your income is greater than your bills. 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.
Think about all the choices available to you when you file for bankruptcy. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. Various loan plans out there can be a lifesaver if you’re facing a foreclosure. This type of plan allows your lender to work with you eliminating charges, extending your loan, and lowering interest rates to help you pay back the loan without drowning in debt. When all is said and done the creditors just want their money, and more often than not will work with you on a repayment plan.
Chapter 7
Before you decide to file for Chapter 7 bankruptcy, you should consider what your bankruptcy might have on others, as your family and friends may be affected. 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. This does not dissolve any co-signers of the debt, and your creditors will continue to try and collect from them.
When you are going through bankruptcy proceedings, it is sure to cause a great deal of stress. In order to keep things together and protect yourself from excess stress, be sure to hire a competent attorney. Get recommendations and look into other qualifications rather just choosing based on cost alone. It may be not be necessary to hire a costly attorney; just make sure he or she is qualified to handle your case. Get referred from others who’ve been in the same situation, check the BBB, and interview several people through free consultations. You could even attend a court hearing to see how an attorney handles his case.
As you must realize by now, bankruptcy is the topic of many dinner conversations lately because of the economy. By using the information you’ve read here, you can now make sound decisions about your finances and choose the bankruptcy option that will work best for you.
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