Deciding to file for bankruptcy is not an easy decision to make; but, in some cases, it is necessary. This situation is handled best when you know what to expect and have information about what to do. Keep reading to learn some valuable tips from someone who has stood in your shoes.
Visit web sites and read information to learn as much as possible about the topic of personal bankruptcy. The United States Some valuable resources include the U.S. Dept of Justice and American Bankruptcy Institute. You will find that the process of filing for personal bankruptcy is easier and less of a hassle with the more information on the subject you gather ahead of time.
Exhaust every other option before making the decision to file for personal bankruptcy. Other available options include consumer credit counseling. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
Credit Cards
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
It’s not uncommon to learn soon after bankruptcy that you are unable to get an unsecured credit card easily. In this event, you should attempt to apply for a secured card or two. This will show other people that you’re serious when it comes to having your credit record in order. In time, it may be possible for you to obtain unsecured cards.
If you are seriously thinking of filing bankruptcy, make sure that you contact an attorney. Bankruptcy is a complex process, and you probably don’t know all the information that is required to navigate it. A qualified bankruptcy attorney can guide you through the filing process.
Ask those you know if they have an attorney to recommend, instead of finding one on the Internet or in the phone book. You want your bankruptcy to go smoothly, and the Internet is rife with fly-by-night companies whose only goal is to prey upon the financially desperate.
Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. The Bankruptcy Code provides a listing of the various asset types that are not included in the bankruptcy process. 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. This will ensure that you do not have any surprises once you have filed bankruptcy.
If you are about to file for bankruptcy, then make sure you hire a lawyer. There are a lot of things to do during bankruptcy and that may be hard for you to understand on your own. When you engage the services of a bankruptcy lawyer, you can be assured of getting the help your need to proceed correctly.
Don’t forget to enjoy yourself during your bankruptcy. It can be several months between the initial filing and the final discharge of debts. That stress can lead to depression, if you don’t take the right steps in fighting it. Remember that your situation is going to improve after you file for bankruptcy.
You can take steps to hang onto your house. You do not have to lose your home in the process of a bankruptcy. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. There are other options such as a homestead exemption which offers you a chance to remain in your home, depending on whether or not you meed certain financial conditions.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Read up on the topic and familiarize yourself with the benefits and drawbacks of both variations. If you do not understand what you are reading, talk to your attorney before making that serious decision.
Do not forget to make quality time for friends and family members. Bankruptcy can take a toll on you. It is long, stressful and makes people feel like losers. Some folks tend to stay in the shadows until their case has concluded. But, isolating yourself from others could bring out more depression. So, it is critical that you spend what quality hours you can with loved ones, regardless of your financial circumstances.
If you are filing for bankruptcy, it is imperative that you have a good understanding of your rights. Occasionally, debt collectors will attempt to convince you that your debt isn’t eligible for bankruptcy. Most loans can be discharged outside of certain things, like child support or loans you are paying back due to student lending. If your creditors are telling you any other kind of debts cannot be cancelled, get a written proof and send it to the general office of your state’s attorney to report this illegal behavior.
If your earnings are higher than your expenses then filing for bankruptcy is a waste of time and money. While filing may seem simple and a way to get out of paying your debts, it does tremendous amounts of long-term harm to your credit report.
Once your initial filing is complete, it is time to take some time to relax a little. Filing for personal bankruptcy can be very stressful for the debtor. That stress can lead to depression, if you don’t take the right steps in fighting it. Remember that your situation is going to improve after you file for bankruptcy.
A great tip to remember if you have filed for Chapter 13 is that you will still be able to receive a loan, so you shouldn’t refrain from trying. It is just tougher. You will need to go through various hoops in order to be approved for any new loan type. You will need to make a budget and prove that you will be able to afford your new loan payments. You’ll also need a valid reason for making the purchase.
Do not forget to list each and every debt you have. Failing to list these could cause the dismissal or delay of your bankruptcy petition. Even small amounts of money contribute to your overall financial picture, so do not exclude them. Include any income from jobs that you do on the side or assets, such as property and vehicles.
Get the word “shame” out of your head when filing for bankruptcy. A lot of people have a negative opinion of bankruptcy, mostly because they misunderstand this procedure. Although dealing with a bankruptcy is stressful, try to focus on the positive. Maintaining a positive outlook during a troublesome financial upheaval is the best way to cope with bankruptcy.
Facing bankruptcy is a negative situation that can bring on stress. To avoid getting too stressed, make sure you hire a reputable bankruptcy attorney. Try not to pick a lawyer based on cost alone. When it comes to choosing the right attorney, consider quality before cost. Speak to those around you at work or social settings, who have dealt with this. Make the most of the BBB and consultations with attorneys to increase your knowledge and decision-making ability. Consider attending a court hearing so you can witness how the lawyer operates.
Nobody enjoys filing for bankruptcy, but at times, you can’t avoid it. After reading this article, you now know how people who have actually experienced bankruptcy got through the process. If you can understand the path that others have followed, your journey will be more successful.
Don’t spend too much time deciding whether or not you should file for bankruptcy. It is absolutely difficult to admit you require help. On the other hand, the longer you delay, the more debt you rack up. Talk to a lawyer as soon as you can to get the advice that you need.