The decision to file for bankruptcy is very serious and should not be taken lightly. If you take a few moments to check out the different tips and tactics listed in the text below, you can begin to realize how to navigate your way through the tough mine field that is bankruptcy. Take the time to educate yourself before you make your choice.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. Study the laws in you state to learn what you need to do and what your options are. Every state has a separate law having to do with bankruptcy. Your home and other major assets may be protected in your state, while they are vulnerable in other states. Be sure you educate yourself on local laws prior to filing.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Bear this in mind; if the tax can be discharged, then the debt can be as well. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
Do not use your retirement fund or savings to pay off creditors. Avoid ever touching retirement funds until you have no other choice. Though you may need to use a bit of your savings, try hard to maintain some of your reserves so that you have some degree of flexibility going forward.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. It is vital that you disclose all information about your assets and income so there are no delays or penalties, such as a court barring you from filing again later in the future.
Instead of getting your lawyer from the yellow pages or on the Internet, try your hardest to find one with a personal recommendation. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
Prized Possessions
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. Certain assets, as listed in the local bankruptcy regulations, are immune from seizure during bankruptcy. It is important that you read this list before filing for bankruptcy, so that can find out whether or not your most prized possessions will be 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 aware of recent changes, if any, in the bankruptcy code. The laws change a lot, so you need to look them up and have a better idea of how to properly approach the bankruptcy process. To learn how the law has changed recently, go online and check your state’s website, or call the state government and ask them.
Protect your home. Bankruptcy doesn’t always mean you’ll lose your home. There are mitigating factors, such as lose of value, or multiple mortgages. Check to see if you pass the requirements necessary to file for a homestead exemption.
You should never feel shame for needing to file for bankruptcy. Going through bankruptcy can cause you to lose a lot of self-esteem. However, having this feeling about yourself isn’t going to help anybody, and your health could even be compromised. If you want to cope with your bankruptcy filing successfully, you must maintain a positive point of view.
Bankruptcy is a hard thing to experience and it could create both emotional and mental stress. To have a reliable and trustworthy guide through the process, find a highly qualified attorney. Don’t skimp when hiring a good lawyer. The most expensive attorneys are not necessarily the best ones. Make sure that you verify their reputation through various sources including people in your circle of friends and the BBB. When looking at bankruptcy attorneys, consider sitting in on one of their court hearings to find out how they handle the case.
As is evident from the information you just read, the bankruptcy process takes time. Many issues need to be handled the right way. By following the above advice, you will make fewer mistakes and find yourself better prepared.
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