Though making the choice to file bankruptcy is never easy, it is often essential. When going through this process it is best you have a lot of knowledge on what is about to take place. The information in this article contains information and advice from people who have actually gone through the process.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Most lawyers will meet with you for free and give you helpful advice, so meet with several. Only choose a lawyer if you feel like your questions were answered. It’s isn’t necessary to make a choice right away. You can take as much time as you need to meet with different lawyers.
Millions of Americans file for bankruptcy each year because they can not pay their bills. When you are faced with this issue, begin to familiarize yourself with your state’s laws. Each state has its own laws regarding personal bankruptcy. Your house is safe in certain states; however, in other states, it isn’t. It is important to understand the laws in your state before filing for bankruptcy.
Learn the newest bankruptcy laws before filing. If you want to file for bankruptcy successfully, it’s important to review the latest applicable laws. They tend to change frequently. Check the website of your state’s legislation or get in contact with your local office to learn more about these important changes.
Chapter 7
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. If Chapter 7 is what you file, your debts will get eliminated entirely. All creditor relationships will be severed. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. It’s important to know what differences come with every type of bankruptcy. This will let you find out what’s best for you.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. 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. A common rule is that dischargeable tax means dischargeable debt. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
Take steps to ensure your home is protected. There are many options available to help protect you from losing your home. You could keep your home; it depends on your home’s value or if a second mortgage is on your home. You are still going to want to check into homestead exemption either way just in case.
Being with the people who you love should be still be a top priority. Going through a bankruptcy can be an excruciating experience. Having to declare bankruptcy leaves many people feeling like a failure. Most people adopt a very negative attitude toward bankruptcy. This is not recommended because you will only feel bad and this may cause you to feel depressed. For this reason, if you are undergoing personal bankruptcy proceedings, you must continue to live a normal life, spending time with your friends and relations.
Don’t forget to enjoy yourself during your bankruptcy. After filing, many people find themselves stressing over their situation and how to fix it. You do not want to have to deal with depression in addition to your financial troubles, so you should take steps to keep yourself happy. Life will get better; you just need to make it through the bankruptcy process.
When it appears likely that you will file a petition, do not start spending your last remaining funds on debt repayment. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. You may need to use some of your savings; however, you should not use all of your savings. Remember that you must safeguard your future financial security.
It is possible to get an auto loan or mortgage during the repayment period for Chapter 13 bankruptcy. It is much harder. You will have to get this loan approved by your trustee. It is important to make a budget and prove that you are able to afford the payment. You will always have to let them know why this item needs to be purchased.
Act when the time is right. The timing of your filing could be important to its success. While there are times that it is ideal to file soon, there are other times in which you should wait. A lawyer is in the best position to evaluate your case and figure out when you should file for bankruptcy.
Get the word “shame” out of your head when filing for bankruptcy. The bankruptcy process makes people feel guilty and ashamed. Feeling like this will not help your situation and can actually do serious damage to your mental well-being. Keeping a positive attitude during worrisome financial trouble is the smartest way to deal with a bankruptcy.
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. If so, apply for a secured credit card. When you do this, it shows your determination to fix your credit history. In time, it may be possible for you to obtain unsecured cards.
Nobody enjoys filing for bankruptcy, but at times, you can’t avoid it. Here you have found some great advice and help to guide you in your bankruptcy. Know that you are not the first, and surely not the last. Gleaning insight from others who already walked the same path can minimize complications and help to reduce your own stress at a difficult time.