Filing for bankruptcy is a huge decision in anyone’s life. Before you go through with it, you need to understand the gravity of the situation. You need to be as well-informed as possible when you make bankruptcy decisions. The information in this article will help you separate fact from fiction. No matter which decision you make, knowledge is essential.
Make sure you’ve exhausted all other options prior to declaring bankruptcy. Debt advisors are one of the many other avenues you can consider. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
Do some research online about personal bankruptcy to get a better idea of what this procedure implies. The United States DOJ, along with a number of other bankruptcy institutes and attorneys specializing in bankruptcy can give you invaluable information. The more you know, the more you’ll knwo that you’ve made a wise decision and the you’re making sure your bankruptcy goes as smooth as possible.
When you feel certain that you must file for personal bankruptcy, refrain from squandering your life savings to pay off unsecured debt. You should not use your retirement savings unless the situation calls for it. Using your savings is necessary, but decimating it and leaving yourself dangling with no future financial security is not a good idea.
Always be honest with the information you give about your finances. Not only is hiding income and assets wrong, it is also a crime.
Use a personally recommended bankruptcy attorney instead of one found through the Internet or phone books. Companies are constantly popping up, claiming to help, yet only seek to profit from your misery. In ensuring that your bankruptcy is as simple as possible, trusting your attorney makes a big difference.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. 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.
You are going to get found out and get in trouble if you don’t disclose all your assets, so be totally honest from the beginning. It is necessary to be open regarding both the positive and negative aspects of your financial life. Keeping secrets or trying to outsmart everyone is not a wise move.
Most bankruptcy lawyers offer a free consultation, so meet with several before you decide on one. It is important to meet with the actual lawyer, because paralegals or assistants cannot give you legal advice. Searching for the best lawyer will help you located the comfort you need during this time.
It is important to know how Chapter 7 filings differ from Chapter 13 filings. Be sure you go on the Internet and do your research to see what’s best for you. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
You may still have trouble receiving any unsecured credit after a bankruptcy. If that is the case, you should try applying for one, or two secured cards. This demonstrates to creditors that you are making a good faith effort to repair your credit. Once you’ve built up a history of on-time payments, you may start getting unsecured credit again.
Chapter 7
Before you decide to file for Chapter 7 bankruptcy, consider how it could affect other people on your credit accounts, such as family members or business partners. If you choose Chapter 7, you are no longer responsible for joint debts. However, if you had a co-debtor, they will be required to pay the debt.
An understanding of your rights is important before filing for bankruptcy. There are bill collectors who will claim that you cannot add your debts to your bankruptcy case. However, there are few debts that cannot be eliminated, like student loans and child support payments. If a collector uses this tactic about debt that can, in fact, be discharged through bankruptcy, report the collection agency to the attorney general’s office in your state.
Before you file for bankruptcy, find out which of your assets will be exempt from seizure. Certain assets, as listed in the local bankruptcy regulations, are immune from seizure during bankruptcy. You can determine exactly which of your possessions are at risk by consulting this list before you file. You may find yourself unpleasantly surprised when the things you value the most are taken from you without warning. This is why it is very important the familiarize yourself with this list.
Before you decide to file, make yourself aware of the laws about bankruptcy. For instance, it’s prohibited for an individual to transfer assets to someone else a year before filing for bankruptcy. Also, a person cannot legally increase their debt amount on credit cards prior to filing.
Gain an understanding of bankruptcy law before you file. There are many traps in the bankruptcy laws that could trip up your case. Mistakes can also have your case dismissed. This is exactly why it’s imperative that you take the time necessary in order to research what you can about bankruptcy. The proceedings will be much smoother with this information.
Quickly decide to start being more fiscally responsible prior to filing. It is especially important to refrain from taking on any new debt before filing. Filing bankruptcy should be your first sign that the way you’re living isn’t any good. Now’s the time to get your finances in order so that you can pull your credit out of the gutter. You want to show them that you are doing everything you can to make your situation better.
Before making your decision to file for bankruptcy, double-check to see if other, less drastic options could make sense. For example, you may want to consider a credit counseling plan if you have small debts. It is sometimes possible to negotiate smaller payment by yourself. If you do this, make sure you save a written record of debt modifications that are negotiated.
It is wise to reconsider filing for divorce if your financial situation is grim. The economic stress of a divorce can be the final blow leading to bankruptcy and this situation may be avoided. It is always wise to think twice about divorcing.
No matter how bleak the situation; always be honest. One of the worst things you can do is lie about your debts and assets. There is no legal way to get around it. Misrepresenting your debts or assets can land you in prison.
Some lawyers utilize free phone service that creditors get referred to when trying to contact you about a debt you owe. You can just give them the number and they can call for confirmation that your debt is indeed part of a bankruptcy. That notification then puts them on notice that they need to desist from contacting you about this debt anymore.
It is important to protect your home when filing bankruptcy. Filing for bankruptcy will not always result in losing your home. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
As you have seen, filing for personal bankruptcy can be complicated. These different choices can be intimidating, but they really aren’t once you get a handle on them. Sit back and soak in all that you read here. Doing this will allow all the information to be processed and benefit your decision making going forward.