Learning more about the process of bankruptcy is, sadly, something that a lot more people have to do today. This is due to the current financial climate. Before filing for personal bankruptcy, take some time to understand the entire process and applicable laws so that you can make wise decisions. This article will help you to make the best choices.
Visit web sites and read information to learn as much as possible about the topic of personal bankruptcy. The United States Department of Justice and American Bankruptcy Institute are both sites that provide free advice. The more you know about it, the better you are able to make the best decision for your situation and to make sure that the bankruptcy proceedings move forward with minimal setbacks.
Credit Card
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
When it appears likely that you will file a petition, do not start spending your last remaining funds on debt repayment. You should never touch your retirement accounts, unless you have absolutely no choice. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. You need to compare this list to the assets you own so that you are not surprised when certain assets are seized. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
Be honest when filing for bankruptcy. Don’t hide liabilities or assets, as they’ll come back and haunt you. Whomever you plan to use should know a lot about the finances that you have, both the good and the bad. Divulge all of your information so that you and your lawyer can devise the best strategy for dealing with your situation.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Most attorneys offer a free consultation which you should take advantage of. Meet with a few before finalizing your plans. Therefore consult with different lawyers and get a feel for them, then decide which one suits your needs It is not necessary to decide immediately after your consultation. That gives you the chance to speak to a number of lawyers.
Find a specialized lawyer if you are thinking about filing for bankruptcy. Having a lawyer on your side is the best way to avoid mistakes and bad decisions. A qualified bankruptcy attorney will guide you through the steps and help you do everything properly.
Familiarize yourself with any new law before you make the final step to filing for bankruptcy. 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. Your state’s website should have the information that you need.
Chapter 7
You may have heard bankruptcy referred to differently, either as Chapter 7 or Chapter 13. Learn the differences between the two before filing. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. All the things that tie you to creditors will go away. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. It is vital that you know the differences between these types of bankruptcies, in order to find the option that’s best for you.
Before filing a bankruptcy claim, make sure that your home is well protected. Filing for bankruptcy will not always result in losing your home. You might be able to keep your home, contingent on certain factors, such as your home decreasing in value or having a second mortgage. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
Before you file for bankruptcy, make sure you understand your rights. Bill collectors can try to scare you into believing that your debt will not be cleared. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If your creditors are telling you any other kind of debts cannot be cancelled, get a written proof and send it to the general office of your state’s attorney to report this illegal behavior.
Bankruptcy is a difficult time that always leads to lots 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 than just choosing based on cost alone. The cheapest attorney may not be the best, but the most expensive may not be the best either. Speak to those around you at work or social settings, who have dealt with this. Make the most of the BBB and consultations with attorneys to increase your knowledge and decision-making ability. Attending a court hearing will give you experience as to how lawyers handle these cases.
As you learned from the introduction of the article, bankruptcy is growing a lot these days, especially since the economy is slowly rebuilding. To make certain you are making wise choices about bankruptcy, make certain to use the information in this article.
This is a limited-time offer. We are not able to guarantee availability if you wait!
