Any situation leading to bankruptcy may not be happy, but your life can improve afterward. Bankruptcy is all about giving you a fresh start. Learn how to make bankruptcy work for you, instead of allowing it to devastate your life.
Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If you have unmanageable debt, you need to familiarize yourself with regional bankruptcy laws. Different states have different laws regarding bankruptcy. Some states protect your home, and others do not. Familiarize yourself with the bankruptcy laws of your state prior to filing.
When you feel certain that you must file for personal bankruptcy, refrain from squandering your life savings to pay off unsecured debt. You should make every effort to leave your retirement accounts untouched until your retire. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Should the tax be dischargeable, the debt is often dischargeable as well. This means using a credit card is not necessary, when it will just be discharged.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. Consider any other options that are available to you, such as consumer credit counseling. Bankruptcy stays on your credit for a whole decade, so if there are less drastic options that will solve your credit problems, it is in your best interest to make use of them.
When it appears likely that you will file a petition, do not start spending your last remaining funds on debt repayment. Unless there are no other options, your retirement funds should never be touched. Though you may need to use a bit of your savings, try hard to maintain some of your reserves so that you have some degree of flexibility going forward.
Use a personally recommended bankruptcy attorney instead of one found through the Internet or phone books. There are lawyers out there who will take advantage of your financial state and not deal honestly with you. Make sure your filing process goes as well as possible by finding a trustworthy lawyer.
Always be honest when filling out paperwork. 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.
If you are meeting with a lawyer to discuss bankruptcy, the initial consultation should be free so ask every question you have. Most attorneys offer free initial consultations, and you should take advantage of the chance to interview multiple practitioners. Only choose an attorney once all your concerns are answered to your satisfaction. There is no need to offer an immediate hire, so take your time. Consulting with several attorneys will also help you find someone you trust.
In conclusion, most circumstance that lead to bankruptcy are not positive. On the other hand, the new beginning that bankruptcy offers can lead to a new life story. Follow the advice from this article, and use personal bankruptcy to get your fresh start.
Familiarize yourself with the bankruptcy code before you file. Bankruptcy law evolves constantly, and it’s important to stay up-to-date to ensure that you file properly. All of these changes will be addressed on the state’s legislative site. You can also contact them directly by phone or office visit.