Are you in a financial jam and you feel like bankruptcy is the only option for you? Fear not, you are in good company. Many people, over the past few difficult years, have found that bankruptcy is the only way to get out from under their mountain of debt. This article will give you helpful tips to make sure your bankruptcy goes smoothly.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. Should the tax be dischargeable, the debt is often dischargeable as well. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
The best way to build your credit up after a bankruptcy is making all your payments on time. A great way to rebuild your credit is to apply for a prepaid credit card. This demonstrates to creditors that you are making a good faith effort to repair your credit. If you do well with a secured card and make strides to repair your credit, you will ultimately be able to receive an unsecured card.
Retirement Funds
When it soaks in that filing for personal bankruptcy, don’t use all of your retirement funds, or all of your savings to resolve insolvency or pay creditors. Avoid ever touching retirement funds until you have no other choice. While dipping into your savings is likely to be necessary, avoid wiping it out completely to prevent leaving yourself with little financial security in the future.
Find out what you exemptions are prior to filing bankruptcy. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. If you are not aware of the rules, you could be setting yourself up for a lot of stress when your most important possessions are taken in the bankruptcy.
When a bankruptcy is imminent, retain a lawyer immediately. It is unlikely that you will be able to comprehend all the various rules and regulations involved in bankruptcy law. Personal bankruptcy attorneys can help make sure everything is done properly.
Any bankruptcy consultation should be free of charge. Most lawyers offer free consultations, so consult with a few before settling on one. Do not make any final decisions until every question you have has been answered. You don’t need to decide what to do right away. You can take your time and check out several attorneys before making your final selection.
Hire a lawyer if you plan on filing for bankruptcy. Bankruptcy is complicated, and having someone to help you navigate the process is crucial. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.
Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. The laws change a lot, so you need to look them up and have a better idea of how to properly approach the bankruptcy process. All of these changes will be addressed on the state’s legislative site. You can also contact them directly by phone or office visit.
It is important to know how Chapter 7 filings differ from Chapter 13 filings. Spend time researching the advantages and disadvantages of filing for each one of these. Do not hesitate to have your lawyer explain any details that seem difficult to grasp. This will help ensure you make the right choice when filing.
Chapter 7
You need to educate yourself on the differences between Chapter 7 and Chapter 13. In Chapter 7 most of your outstanding accounts will essentially be erased. Any ties that you have with creditors will be dissolved. If you file using chapter 13 bankruptcy, you will go through a sixty month repayment plan prior to all your debts being completely dissolved. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Consider filing using chapter 13 bankruptcy. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Remember that if you even miss one payment that’s due under this plan, the court could dismiss the whole case.
Spend time with loved ones. Going through bankruptcy is a lot of stress. It is extremely stressful and long, and it can leave you feeling ashamed of yourself. Avoidance of friends of family during the process is not uncommon. Isolating yourself from your loved ones can lead to feelings of depression. Because of this, you need to make sure you spend as much time as you can with your family and friends, even if you are ashamed of your finances.
If you are moving forward with a Chapter 7 bankruptcy, you need to learn how that can negatively affect anyone who shares loans with you. You can relieve yourself of any liability for debts that you may share with someone else through a Chapter 7 filing. However, anyone sharing the loan with you may be forced to pay back the entire amount for the amount in full, which spell financial disaster for them.
Take action when the time is right. Timing is very important when it comes to personal bankruptcy filings. Sometimes, you may need to file quickly; however, at other times, you should wait until the worst is over. Speak with an attorney who specializes in bankruptcy to figure when is the best time to file, according to your situation.
Facing bankruptcy is not a fun situation and cause a lot of stress and anxiety. The best way to lessen this stress is to employ a lawyer, who can handle most of it for you. Don’t allow cost to determine who you hire. You do need someone who is costly, just someone who is good at what they do. Make sure that you verify their reputation through various sources including people in your circle of friends and the BBB. Try attending a hearing to find out how bankruptcy attorneys handle the situation.
Before filing personal bankruptcy, consider other options. You should consider credit counseling. May non-profit companies are available to help you. These companies lower your interest and payments by working with your creditors. You will pay them, and in turn, they will pay the people you owe money to.
Do not wait until things go from bad to worse before filing bankruptcy. Many people simply try to ignore their financial troubles, hoping that they will somehow go away, but this is a huge mistake. Your debt can quickly get way too large, and as a result, you may discover that you must foreclose your home or garnish some of your wages. Once you are aware that your financial situation is not manageable any more, your best bet is to speak with a bankruptcy attorney and find out what he or she recommends.
As stated in the article above, bankruptcy is a common way for many people to alleviate their troubled financial situation. However, you are in a better position to do so than they are, because you’ve read this article. Apply the knowledge from this article to go about your bankruptcy in a smooth fashion.