Have your finances become unmanageable? Do you feel that the only thing you can do is file for personal bankruptcy? Do not despair, because there are other people in the same boat. Some people have turned to bankruptcy, as it is their only option for getting rid of a bad financial situation. The following article will provide you with tips and advice for navigating bankruptcy.
Don’t use a credit card to pay off your taxes before filing for bankruptcy. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. You can meet with a few lawyers before deciding on one. Most lawyers provide a free initial consultation. Only choose a lawyer if you feel like your questions were answered. You can think about your decision before making a commitment. Consulting with several attorneys will also help you find someone you trust.
Chapter 13
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Should you choose Chapter 7, your total debt load will be erased. With very few exceptions, the connections between you and your creditors will be severed. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
It is important to protect your home when filing bankruptcy. It isn’t inevitable that you will lose your house when you file for bankruptcy. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
Don’t isolate yourself from family and friends. The process of bankruptcy can seem brutal. It takes time and a lot of people feel stressed and ashamed throughout this procedure. A lot of people become depressed and withdrawn until their bankruptcy is discharged. On the other hand, isolation of a self-imposed nature can only worsen your feelings, opening the door to mental depression to join your financial depression. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
Once you have completed the bankruptcy filing, you should take time to do something you enjoy. Many people who undergo this process become way too stressed out. That stress could lead to complete depression, if you do not take the necessary steps to fight it. Your life will most likely improve once you’re over this hump, so relax.
Be certain to have a good understanding of bankruptcy regulations prior to filing a petition. There are many pitfalls you can easily fall into, such as transferring away assets to prevent them from being included in the filing. Also, a person cannot legally increase their debt amount on credit cards prior to filing.
Financial Information
Include your entire financial information when you file for bankruptcy. Failing to disclose all of your financial information can cause your bankruptcy petition to be dismissed, or, at the very least, delayed. The most meaningless, innocuous finance or expenditure needs to be listed when you file a claim. This financial information may include income from side jobs, vehicles you own and loans you have not paid off.
As previously mentioned, you’re not alone in the world when it comes to filing for bankruptcy. Unlike the uninformed masses, however, you took the time to read this article, so you are more informed. Use the above tips to make sure the bankruptcy process goes smoothly.
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