Personal bankruptcy is always an option for those who have had possessions, such as vehicles, repossessed by the Internal Revenue Service. Bankruptcy can wreak havoc on credit, but it may be the only way out of your situation. Continue reading for more information about how and why to file for bankruptcy.
Ask yourself if filing for bankruptcy is the right thing to do. Look into other options, 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 is no other choice a retirement account should not be used. 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.
One of the most important things to remember when filing for bankruptcy is to be honest and truthful every step of the way. You can lose the right to file bankruptcy now or in the future if you try to withhold information about your assets and income. So it is critical that you disclose everything honestly to to avoid that and any other penalties the trustee might impose if he discovered your attempt to hide information from the court.
Instead of relying on random selections from the phone book or Internet, ask around and get personal recommendations. There are plenty of companies who know how to take advantage of people who seem desperate, and it’s important to be sure your bankruptcy can go smoothly; take your time and choose someone you can trust.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. To find an itemized list detailing assets exempt from bankruptcy, find the Bankruptcy Code. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. Failure to do this could cause some ugly surprises down the road when you discover that your valuables must be seized.
Determine which assets won’t be seized before filing for bankruptcy. The Bankruptcy Code has lists of various asset types that are exempt during the process. It is vital that you completely understand which assets are protected and which assets can be seized prior to filing bankruptcy. If you fail to do so, things could get ugly.
Make sure you know how to differentiate between Chapter 13 and Chapter 7. There is a wealth of information online about each type of bankruptcy and their respective pluses and minuses. If the information you read is unclear to you, take the time to go over the specifics with your lawyer before making a decision on which type you will want to file.
Bankruptcy should not be filed by anyone who makes more than their bills cost. Bankruptcy may seem to be the easy way out, but your credit report will show the scar for the next ten years.
Personal Bankruptcy
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. All debt will be eliminated with Chapter 7. The ties with the creditor will be broken. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Consider all options before filing for bankruptcy. Some alternatives to filing for personal bankruptcy include debt repayment plans, interest rate reduction plans, and debt consolidation. Talk with the personal bankruptcy lawyer to find out more. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. Lenders can assist you in a lot of ways, by cutting interest rate charges and cutting off late fee charges. They can also lengthen the loan. Creditors would rather be repaid, however slowly, than have you declare bankruptcy.
Do not forget to enjoy life a little once you get through the initial filing process. It’s easy to be stressed during this time. That stress can lead to depression, if you don’t take the right steps in fighting it. Your life will see improvement after you get past the bankruptcy.
See if your attorney can help you lower your payments if you want to keep your vehicle. Often, you can negotiate a lower payment through bankruptcy. Your car must have been purchased more than 910 days prior to filing, be a high interest loan, and you must have had a steady work history for this to work.
Don’t hide from your friends and family while you go through bankruptcy. Going through bankruptcy is difficult. It is long, stressful and makes people feel like losers. Lots of people decide they should hide from everyone else until it is all over. This is not recommended because you will only feel bad and this may cause you to feel depressed. Spend time with your family, talk about your problems and find things that relax you.
Act at the right time. The timing of your filing could be important to its success. Sometimes you should file immediately; however, there are times when it is better to delay until the worst has passed. Talk with a bankruptcy attorney to find out the ideal timing for filing based on your particular situation.
Bankruptcy should not be put off until the very last second. Some people think that by ignoring financial problems, they will just disappear. This kind of thinking could prove to be a mistake. It is too easy for debt to mount up and become uncontrollable, which could lead to loss of assets or wages. The minute you realize that your debts are too big to take care of, contact a bankruptcy attorney to discuss your options.
The introduction to this article made it clear that filing for bankruptcy is always on the table if you are chest-deep in debt. That said, you should think twice before filing, since it leaves a huge black mark on your credit. The best way for someone to avoid financial stress and hold onto their possessions is by learning more about bankruptcy.
Consider all of your options before filing for bankruptcy. Credit counseling is one option you should consider. Various non-profit companies are out there to give you assistance. They can work with both you and your creditors to find a feasible way in which your debts can be paid off. You will pay them, and in turn, they will pay the people you owe money to.