Do not consider bankruptcy until you have researched your other options. Not only the economy, mind you, but people’s spending habits are also to blame for the increase in claims filed. Before you file for personal bankruptcy, educate yourself about the subject, so you make the right decisions. Read this article to learn more about bankruptcy.
Individuals often seek to file for personal bankruptcy protection if their debts exceed their ability to repay them. If you’re in this situation, learn about the laws where you live. Each state has its own set of rules regarding bankruptcy. Your house is safe in certain states; however, in other states, it isn’t. Make sure you know the laws where you live before you file.
Make sure that you understand everything you can about personal bankruptcy by visiting websites that offer information. The United States Check out the Bankruptcy Institute site and do some research about consumer’s rights. As with everything in life, the more you know about filing a claim, the better off you’ll be. You can properly prepare when you know what you’re preparing for.
Credit Card
Think twice if you have struck upon the idea of paying off your taxes by credit card and subsequently filing for personal bankruptcy. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Generally speaking if you can discharge the tax, you can discharge the debt. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
If filing bankruptcy is in your future, don’t waste any savings you may have attempting to pay off your debts. Don’t touch retirement accounts unless you don’t have a choice. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. There are lawyers out there who will take advantage of your financial state and not deal honestly with you. Make sure your filing process goes as well as possible by finding a trustworthy lawyer.
You must be entirely candid when it comes to declaring assets and obligations in your bankruptcy petition. Your bankruptcy lawyer has to know every detail of your finances, whether bad or good. Put everything out on the table and craft a wise plan for handling the situation the best you can.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy might be a good option, so don’t overlook it. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. The plan is usually for a term of three to five years, and a discharge will be granted at the end of that term. However, if you miss even one payment, the court will dismiss your entire case.
Filing for bankruptcy is not recommended when you have income more than your debts. Although bankruptcy might seem to be an easy way of being able to pay for your debts, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.
Before you make the decision to file Chapter 7 personal bankruptcy, take time to think about anyone it could affect. A Chapter 7 bankruptcy will relieve you of your legal responsibility to pay any joint debts. Creditors, however, will hold the co-signer liable for the entire balance of the debt.
Filing bankruptcy under Chapter 13 means you can still get a loan for a car or a mortgage. But, it could be harder. You will need to go through various hoops in order to be approved for any new loan type. Create a budget and prove that you will be able to afford it. You will also need to have a good reason why you need the item.
Prior to filing, it is important that you know all about bankruptcy laws. For instance, you may not be aware that a filer is forbidden from transferring assets from his or her name for one full year before the petition is filed. It’s also prohibted to run up debt on credit cards just prior to filing.
If you are planning to file for bankruptcy in the immediate future, you should refrain from taking out cash advances via your credit cards. This is considered fraud, and even after bankruptcy you can be forced to pay all of that money back to the credit card company.
Before you file for bankruptcy, be sure you know how to properly repay your debts. Bankruptcy law may actually prevent you from repaying your credits for three months. Worse, if you’ve taken out a loan from your family, you can’t repay them for a whole year before filing. Read the rules before making financial decisions.
As you can see, bankruptcy is quickly becoming more popular due to the poor state of our economy. Apply the tips from this article to make the best bankruptcy choices.
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