Everyone is suffering from the bad economy. A poor economy means more people than ever have debt and are losing their jobs. Deep debts usually wind up in bankruptcy. This is not a pleasant situation. If you’re considering bankruptcy, the following article can help you make some sense out of it.
Generally bankruptcy is filed when a person is facing insurmountable debt. If you find yourself going through this, you should know all about the laws that are in your state. Each state has its own laws regarding personal bankruptcy. Your home is safe in some states, but in others it’s not. Be aware of bankruptcy laws before filing your claim.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Ensure that you are providing genuine details when filing a bankruptcy petition, because honesty is the best policy when dealing with bankruptcy. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Be aware that getting unsecured credit is going to be tough once you’ve gone through bankruptcy. If you find that to be the situation, consider requesting secured cards. You can exhibit your desire to rebuild your credit this way. It will take time, but when creditors see a pattern that satisfies their need to see your good faith with payments, you will then be able to apply for unsecured cards.
Try going to a personally recommended bankruptcy lawyer instead of using a phone book or the Internet. To handle your bankruptcy, you need a trusted attorney, not a shady one that is out to take your money.
Don’t throw in the towel. Certain property cannot be repossessed while you are in the process of filing for bankruptcy so be sure to learn about the laws in your state. If your property has been repossessed less than 90 days prior to your bankruptcy filing, there is a good chance you can get it back. Interview and research attorneys before choosing one to help you with your bankruptcy.
Don’t pay for an attorney consultation and ask him or her anything you want to know. Almost all lawyers will give a free consultation, so meet with more than one before making a decision on whom to hire. Decide which lawyer you like best buy reviewing all of the lawyers’ answers to your questions. Choose the lawyer who addressed your issues the best. You do not need to make a decision immediately after the consult. Take your time, and schedule consultations with more than one lawyer.
Think carefully about your different options before filing for bankruptcy. For example, if your debt is small, try a type of consumer counseling program. Also, you could try to get your payments lowered on your own. If you decide to do this, get a copy of anything you agree to.
Chapter 7
Know the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. Any ties that you have with creditors will be dissolved. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. Take the time to learn more about these different options so you can make the best decision possible.
The economy is showing signs of recovery, but unemployment and underemployment are still high. If you lack a steady job, you still may be able to prevent the need for a bankruptcy filing. This article should have given you some solid advice for staying afloat in tough times. Best of luck.
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