Bankruptcy is very common in today’s economic climate. Sustained unemployment has led many people to file bankruptcy recently. Prior to taking the plunge and filing for bankruptcy, you need information to know if it is right for you, and if it is, what kind of bankruptcy to file. Read further for some helpful advice regarding bankruptcy.
Make sure that you understand everything you can about personal bankruptcy by visiting websites that offer information. The United States DoJ along with other private and nonprofit organizations all have insightful knowledge. The greater your body of knowledge, the better prepared you will be to make the decision of whether or not to file and to make certain that if you do file, the process is a smooth one.
Credit Card
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. 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 main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
Don’t hide assets or liabilities when filing for bankruptcy. Whomever you use to file with must know everything there is to know about your finances, both good and bad. Do not hold anything in secret and create a strategy on how you will deal with the things you are facing.
Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. This area of law is in constant flux and it is imperative that you know where the law stands at the time you file for your bankruptcy. All of these changes will be addressed on the state’s legislative site. You can also contact them directly by phone or office visit.
Before you decide to declare bankruptcy, make sure that a less-drastic solution isn’t more appropriate. If your debt is relatively low, you may be able to manage it with credit counseling. You may also find success in negotiating lower payment arrangements yourself, but be certain to get any arrangements with creditors in writing.
There are differences between Chapter 13 bankruptcy and Chapter 7; be sure to familiarize yourself with both. Learn the benefits and drawbacks of each type before deciding which is right for you. If you don’t understand the information you researched, consult with your attorney about the details before you decide which type of bankruptcy you want to file.
Chapter 13 Bankruptcy
Consider filing using chapter 13 bankruptcy. 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. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
Filing for bankruptcy is not recommended when you have income more than your debts. 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.
Don’t forget to enjoy your life once your finances get fixed. So many people become stressed when they file. It is essential to cope with this stress well, to prevent becoming depressed. After you have finished filing for personal bankruptcy, your life will improve.
When you are filing for bankruptcy, make sure you list all of the financial information you may have. You can delay your bankruptcy process if you do not add in all important information. Add absolutely everything to your list, including small amounts. This includes any jobs you have on the side, any vehicles you have and any outstanding loans.
Understand the rules and laws before submitting your petition for bankruptcy. There are many laws which govern bankruptcy; therefore, to protect your bankruptcy case, know the rules. There are mistakes that may cause the dismissal of your case. Thoroughly research bankruptcy before you make the decision to file. The proceedings will be much smoother with this information.
Take a look at all of your financial options before filing for personal bankruptcy. You should consider credit counseling. There are even non-profit companies that may be able to help you. They can negotiate with each of your creditors to work out payments that you can afford, along with reduced interest rates. Your payments are made to the organization and they repay the creditors.
Before filing for bankruptcy, it is important to still be smart with your finances. Do not take on more debt or use more of your current credit. Your creditors will take your current finances into account when assessing your bankruptcy filing. Try demonstrating that your current behavior and financial habits have positively changed.
About two months after you’ve done bankruptcy, you can get copies of your various credit reports from the three agencies. Look to see that the reports have accurately documented your discharge and other information. Contact the credit reporting agencies if there is a discrepancy in order to rebuild your credit.
It is important to list all debts when filling out your bankruptcy papers. If you forget to include any of your debts in the filing, you lose the chance to discharge them. It is solely your responsibility to ensure all important information is documented. Doing so can help you make sure you don’t end up paying debts that should have been discharged.
As this article stated, the subject of bankruptcy is on many people’s minds nowadays, due to the economy. Use the tips you just read to make good decisions and remain in control of your financial situation.
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