Mention of the word, “bankruptcy” is enough to terrify many. Between rising debt and pressure from the family, it can leave you sleepless at night. If you are in a situation that may require a bankruptcy filing, don’t let fear overcome you. Read this article and learn valuable tips and advice to make this scary situation much more manageable.
A lot of people find themselves needing to file bankruptcy when they are unable to pay their bills. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. The laws governing bankruptcy vary from state to state. In some areas, your residence may be completely exempt, but in others, it will not be. Do not file before learning about the bankruptcy laws in your state.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. Remember that if you hide your valuable assets or income from your bankruptcy trustee, you may risk a number of penalties and complications. Among these is the possibility that you could be blocked from ever filing again.
When a bankruptcy is imminent, retain a lawyer immediately. Filing for bankruptcy is complicated and there is no way you can understand all you need to know. A bankruptcy attorney can advise you on how proceed properly.
Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. For example, you may want to consider a credit counseling plan if you have small debts. Negotiating with creditors is another option, but creditors are notorious for “forgetting” these agreements, so get them in writing!
If you are going through a bankruptcy do not fall victim to guilt and pay off debts that you do not need to pay. Retirement accounts should never be accessed unless all other options have been exhausted. Using your savings is necessary, but decimating it and leaving yourself dangling with no future financial security is not a good idea.
Chapter 7
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Should you choose Chapter 7, your total debt load will be erased. You will be removed from any contracts you have with your creditors. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. When choosing the type of personal bankruptcy that is correct for you, it is very important that you know the differences.
If someone is scared of filing for personal bankruptcy, their feelings are completely legitimate. While you may have been frightened of bankruptcy in the past, you don’t need to be scared anymore. This article has armed you with information. Apply what you’ve learned here, and get a fresh start for you and your family.
Don’t give up. You can often have property returned to you. Autos, jewelry and even electronics that have been repossessed, could be returned. Filing for bankruptcy may allow you to regain ownership of recently repossessed property. A qualified bankruptcy attorney can walk you through the petition process.