Carrying too much debt is a problem a lot of people are dealing with now. Collection agencies constantly hunt them down and their bills keep increasing. If this description applies to you, you may wish to think about filing for personal bankruptcy. Go over the tips presented in this article to figure out if bankruptcy is the best solution.
Generally bankruptcy is filed when a person is facing insurmountable debt. Study the laws in you state to learn what you need to do and what your options are. Each state has its own set of rules regarding bankruptcy. Your home is safe in some states, but in others it’s not. Become acquainted with local bankruptcy laws before filing.
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. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
Be certain you are making the right choice before you file for bankruptcy. Consider any other options that are available to you, such as consumer credit counseling. Your credit record will be harmed by a bankruptcy filing, and therefore prior to making such a decision, it is wise to investigate other options in order to minimize the damage you suffer.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. You should not use your retirement savings unless the situation calls for it. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.
If you’re filing for bankruptcy soon, be sure you are going to hire a lawyer. It is difficult to make all of the necessary decisions yourself, and expert guidance will be helpful. Personal bankruptcy attorneys can help make sure everything is done properly.
Never give up. Many times you can get repossess property back once bankruptcy has been filed. If you have been subject to a repossession during the 90 days before your filing, you stand a good change of getting your property back. A qualified bankruptcy attorney can walk you through the petition process.
Chapter 7
Know the differences between Chapter 7 and Chapter 13 bankruptcy. In Chapter 7 most of your outstanding accounts will essentially be erased. This includes creditors and your relationship with them will become no longer existent. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Learn what you can about Chapter 13 bankruptcies. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. Make sure that you meet with an actual lawyer and not an assistant or paralegal, as these people are not allowed to provide legal advice. It will be important to work with a bankruptcy lawyer that you feel comfortable with; a little comparison shopping will help you find the right one.
Before you file for personal bankruptcy, weigh all of your options. There are many recouses available to help you lower your payments and get back on track. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. Remember that creditors desire to get paid and usually debt repayments are often preferable when dealing with bankrupt debtors.
Before you file for bankruptcy, be sure you know how to properly repay your debts. The laws regarding bankruptcy most often prevent you from paying back some creditors for up to 90 days before filing, and friends and family for up to one year. Study applicable regulations prior to making any financial choices.
Do not doddle with whether or not bankruptcy is for you. It’s very difficult admitting you need help, but waiting too long can actually make it worse. Making use of a bankruptcy pro immediately can make the difference in success and failure in bankruptcy court.
If you make more money than what you owe, filing for bankruptcy is not a good option. While bankruptcy may seem like an easy way out of having to pay back all of the debt that you owe, it is a stain that will remain on your credit report for seven to ten years.
Every single asset is not necessarily lost when you file for bankruptcy. You may be able to keep certain property. This includes items, such as jewelry, clothes, household furnishings, electronics, etc. While this varies based on the laws in your area, your particular circumstances and the kind of bankruptcy you choose to go with, it may be possible to keep big-ticket items like your automobile or even your residence.
If you’re in financial trouble, you may want to rethink getting a divorce. Many people file for bankruptcy right after getting divorced because they cannot deal with their financial hardships. Thinking divorce through is the smart thing to do.
Make sure that the attorney you hire is an experienced bankruptcy lawyer. There are a plethora of law firms that you could work with. While you may be thinking a cheap costing attorney is the way to go, the first thing you should do is determine whether or not they are experienced in bankruptcy.
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. A Chapter 7 bankruptcy will relieve you of your legal responsibility to pay any joint debts. Sadly, this will not be the case for your co debtor. Your creditors may simply turn their attention to your hapless acquaintance.
Joining an online community with people who are also going through the bankruptcy process can be a great way to feel better. Filing for bankruptcy can make you feel extremely alienated, even from your close friends. The silver lining here is that you can find many people who are sharing in your struggle. Take online support groups, for example. You can speak to real people who know exactly what you’re going through.
Credit Card
If you owe money on taxes, don’t look at bankruptcy as a way to avoid paying. Some people think they can claim bankruptcy after charging the taxes owed on their credit card. They do this with the assumption that they can trick their way out of paying their taxes, since the balance is on a credit card. This is illegal, however, and you will be stuck with the balance owed on your card, as well as the fees and interest that it accumulates.
Do some research about bankruptcy laws before filing for bankruptcy. There are often laws prohibiting the transfer of money from the filer for a certain period preceding the bankruptcy filing. Also, you must never incur significant new obligations must prior to filing for bankruptcy.
You have undoubtedly gleaned from the text above that bankruptcy doesn’t have to be a difficult process as long as you’re informed. If you deal with your stress in a positive way and make level-headed decisions, your bankruptcy filing will be a step in the right direction for a renewed financial future.