When someone has to file for bankruptcy, it is never a good thing. Not only are there a host of unpleasant things that will take place, it is often shameful to tell people about your monetary situation. Don’t let bankruptcy overwhelm you; the article below can help.
When people owe more than what can pay, they have the option of filing for bankruptcy. If this sounds familiar, you should read up on the bankruptcy laws in your state. Most states differ in their laws governing bankruptcy. In some states, your home is protected, while in others it is not. You should be familiar with the laws for your state before filing for bankruptcy.
Have a good look around the Internet to see what information is relevant to you regarding bankruptcy. Many sites, including the U.S. Department of Justice and American Bankruptcy Institute are two such places to look. 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
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. Because of this, transferring the debt to your credit card is pointless.
As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. You should not use your retirement savings unless the situation calls for it. While dipping into your savings is likely to be necessary, avoid wiping it out completely to prevent leaving yourself with little financial security in the future.
Do not be afraid to remind your attorney of important specifics of your case. Don’t just assume they already know and that they have these important details committed to memory or written down. Remember that you’re the boss. You’re paying your lawyer, so you should not be afraid to have your say. After all, the quality of your life hangs in the balance.
You may still have trouble receiving any unsecured credit after a bankruptcy. If this is so, apply for a secured card or two. This at least shows you are making an honest attempt at reestablishing your credit worthiness. Eventually, you could be able to obtain unsecured credit.
When a bankruptcy is imminent, retain a lawyer immediately. You may not know everything you need to know in order to have a successful outcome of your case. A personal bankruptcy lawyer will be able to help you and ensure you are doing things the proper way.
Always weigh your options carefully prior to deciding to dive head first into filing a bankruptcy claim. For example, consumer credit counseling programs can help you by renegotiating your debts with your creditors into payments that you can afford. You may have luck negotiating lower payments by dealing directly with creditors, but be sure to document any get and new agreement terms in writing from each creditor.
Unsecured Debt
Consider filing for 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. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. The length of the plan is generally up to five years, and when this is over, you will be free of unsecured debt. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
If you meet certain requirements, you may be able to get a lower monthly payment on your financed vehicle. In many cases, Chapter 7 bankruptcy can lower your payments. If you meet the criteria specific to your state, it may be a good option to consider.
Do not think of filing for personal bankruptcy as a shameful thing. Many people get feeling of guilt when going through bankruptcy. Try not to give in to these feelings, as they are of no help to you and they can affect your emotional health. These difficult financial times can easily take their toll on anyone. One of the best ways to cope with the situation is to maintain a positive attitude.
Do not put off filing for bankruptcy. Lots of people turn the other shoulder towards their financial woes and hope that they’ll disappear eventually. However, you should never do this. Debt can snowball very fast, and by ignoring it, you increase the chances of worse problems, such as foreclosure and wage garnishments. As soon as you’ve decided that you no longer have a handle on your debts, consult a bankruptcy lawyer to see if bankruptcy is right for you.
Choose your bankruptcy attorney carefully. This type of law is a popular attraction for inexperienced newcomers. Often times, people choose lawyers that aren’t licensed properly or that don’t have enough experience. Don’t fall victim to this. A basic Internet search can turn up client ratings and relevant background information.
Chapter 7
If after filing for Chapter 7 you aren’t qualified for Homestead Exemption, there is a possibility you can file Chapter 13. For some people it is a good idea to convert your Chapter 7 case to a Chapter 13; talk to your lawyer about which action to take next.
If a mistake causes your case to be dismissed, you may re-file. But, generally speaking, the automatic stay will apply for 30 days only if you have already received a prior dismissal. It is possible to get an extension if you can prove to the judge that there was a good reason for your mistake and your re-filing.
As you can see, you don’t need to surrender to bankruptcy. By following the tips presented here, you can avoid filing for personal bankruptcy. Use the information you have learned here, and see how you can revamp your finances and protect your valuable credit history.
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