The truth is that no one wants to go through bankruptcy, but it may be the only conceivable way to get out from the mounting debt. Life can change quickly, and bankruptcy may be your only choice. Knowing how to deal with this is vital. If that happens to you, you can use the information laid out in this article.
Do not use a credit card to pay income taxes and then file for bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. It is pointless to use credit cards if they can be discharged.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. The Bankruptcy Code lists assets considered exempt from being affected by 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. While it might not be possible to protect a particularly beloved possession, at least you will know in advance whether or not you risk losing it.
Make sure you’ve exhausted all other options prior to declaring bankruptcy. Look into credit counseling to see if it could help you work out of your debt without bankruptcy. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
When you document your financial records, it is vital that you are 100% truthful in order to have a successful resolution to your bankruptcy process. Do not hide any income or assets or go on a spending spree before filing for bankruptcy: the court will find out and will not have a positive opinion of you.
No matter what, don’t give up! If you file for bankruptcy, you might be able to reclaim certain property that has been repossessed, such as your car, electronics or jewelry. You should be able to get your possessions back if they have been taken away from you within 90 days before you filed for bankruptcy. Consult with a lawyer that can walk you through the filing process.
Seek a less serious option prior to filing for bankruptcy. Those with smaller debts may find use in a program for consumer credit counseling. You could even negotiate for lower payments. However, you should ensure that you always obtain a written record of all the changes to your debt that you’ve agreed to.
Free Consultation
Since it is possible to obtain a free consultation from the majority of bankruptcy lawyers, meet with a few of them prior to choosing one. Talk to the lawyer and not his assistant, who may not be legally able to help you. By meeting with several attorneys through a free consultation you will be able to choose which attorney you feel more comfortable with.
Don’t hide from your friends and family while you go through bankruptcy. Bankruptcy proceedings can be extremely harsh. It is long, hard and sometimes leaves people feeling guilty or ashamed. A lot of people become depressed and withdrawn until their bankruptcy is discharged. However, this isolation will just make you feel worse, and it could cause you to be depressed. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
Learn the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. By researching each type, you can begin to understand which method is right for you. Ask your bankruptcy lawyer to clarify anything you don’t understand before making a final decision about which type of bankruptcy to file.
Bankruptcy should not be filed by anyone who makes more than their bills cost. Although bankruptcy may feel like a simple method of getting out of your large debt, it leaves a permanent mark on your credit history for up to 10 years.
Make sure bankruptcy is truely your only option before filing. Talk to a bankruptcy lawyer to see if a debt repayment plan or reduction in interest rates is a viable option for you instead of bankruptcy. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. Your lender can adjust your loan in many ways including extending the time you have to pay, reducing your interest rate, or canceling some of your late fees. Creditors would rather be repaid, however slowly, than have you declare bankruptcy.
After you have finished with the initial process of filing, you can relax and take a breather. It’s easy to be stressed during this time. This stress could actually cause depression, if you don’t combat it. Life will get better; you just need to make it through the bankruptcy process.
Don’t file for bankruptcy unless it’s absolutely necessary. Consider whether debt consolidation may be a more viable alternative. The bankruptcy process takes forever to finish and is very nerve-wracking. It will also limit your ability to get credit for the next few years. Therefore, before you file for bankruptcy you need to consider all of your alternatives.
It is in your best interest to be abreast of your rights in petitions for bankruptcy. There are bill collectors who will claim that you cannot add your debts to your bankruptcy case. There are a few debts that cannot be cleared, such as student loans and child support, but be sure to know the details when dealing with debt collectors. If you are told differently by a collector, research the information yourself. If you find they are in error, get the name of their company, phone number and any identifying info so you can report it to the attorney general in your area.
Once you realize you are headed towards bankruptcy you will need excellent advice on what are the correct steps to take. The process is anything but simple, and information will become your best friend during this difficult time. Much of the information you need was provided to you in the article above.