Although it is sometimes needed, deciding to file for bankruptcy is hard. The best way to approach the situation is with an education about the process. Read the below article for excellent advice from people who have personally went through bankruptcy.
If you are feeling like you are seriously going to have to file for bankruptcy then do not clear out your savings. Retirement accounts should never be touched if it can be helped. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Should the tax be dischargeable, the debt is often dischargeable as well. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. Do not try to shield some assets or income from your creditors. This can get you in serious trouble and prevent your bankruptcy petition altogether.
Don’t hide assets or liabilities when filing for bankruptcy. Penalties may include fines, imprisonment or denial of the filing. Don’t hold back information and create a strategy so you can deal with what’s really happening.
Chapter 13
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. All debt will be eliminated with Chapter 7. Your ties with all creditors will get dissolved. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.
Many bankruptcy attorneys offer the first consultation with no charge, so consult with several before deciding on one. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. Be sure to check out a number of lawyers so that you will find one who is just right for you.
Learn about teh differences between Chapter 13 and Chapter 7 bankruptcy. Read up on the topic and familiarize yourself with the benefits and drawbacks of both variations. 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.
There is hope! Once bankruptcy has been filed, you may be able to regain possession of items such as electronic goods or cars that were taken away from you. There is a chance that you can get back your property if it has been less than ninety days since repossession. Consult with a lawyer who can advise you on what you need to do to file a petition.
Determine if bankruptcy is necessary. Perhaps just consolidating some of your existing debt, could make them easier to manage. Filling for bankruptcy is a lengthy, stressful process. The future of your credit will be greatly affected. Because of this, you should be sure that bankruptcy is your only option before you file.
Declaring bankruptcy is not something most people aspire to, but can be unavoidable. Now that you’ve come to the end of this piece, you have some ideas about how the process works. You will find that every journey in life goes more smoothly if you heed the advice of those who go before you, and this one is no different.