When your debts get out of control, it’s common to start worrying about losing your possessions and assets that you care about most. When your debt situation gets serious enough, you may want to consider personal bankruptcy as a way to save yourself. Continue reading for tips to help you get through bankruptcy.
Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If you are in this position, you need to be familiar with the laws in your area. Laws differ from one state to the other. For example, the personal home is exempt from being touched in some states, but not in others. It is important to understand the laws in your state before filing for bankruptcy.
Do some research online about personal bankruptcy to get a better idea of what this procedure implies. The United States Department of Justice, the American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys, all provide valuable information. By being well armed with the correct knowledge, you can be certain of the decision that you have made. Additionally, you will understand the processes necessary to conduct your personal bankruptcy matters in a smooth manner.
Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. The Bankruptcy Code has lists of various asset types that are exempt during the process. You need to read the exemptions for your state, so you know what property you can protect. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
Don’t pay for an attorney consultation and ask him or her anything you want to know. Most attorneys offer free initial consultations, and you should take advantage of the chance to interview multiple practitioners. You should make a final decision only once all of the questions or concerns are sufficiently attended to. You do not need to make a decision immediately after the consult. That gives you the chance to speak to a number of lawyers.
One of the most important things to remember when filing for bankruptcy is to be honest and truthful every step of the way. As long as you are not hiding income or assets from the courts, you can ensure that there are no difficulties with your petition. This will save you from having your petition dismissed and your debts dropped from re-filing.
Bankruptcy is tricky and hiring a good lawyer will be a must. There are many different aspects to filing bankruptcy, and you may not understand everything there is to know. An attorney will make sure that everything is being done correctly.
Chapter 13
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Chapter 7 involves the elimination of all of your debt. Your responsibilities to your creditors will be satisfied. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Weigh all the information you can find on- and off-line to make an educated decision. If you have trouble understanding the wealth of information, talk to your lawyer so he or she can help you make an informed choice.
Be around family as much as possible. Going through bankruptcy is a lot of stress. It can take a long time, take a great emotional toll and cause people to feel embarrassed and defeated. Lots of people decide they should hide from everyone else until it is all over. Isolating yourself from your loved ones can lead to feelings of depression. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
Make sure you consider implications of bankruptcy before filing for Chapter 7. When you file a Chapter 7, your debts will be dissolved. But, bear in mind, the debt now becomes the sole responsibility of your co-debtor.
While personal bankruptcy can always be an option, don’t do it before looking at other options. Be aware that some debt consolidation companies could cause you even more debt. Keep the advice you read in mind so that you’re able to make smart choices and stay out of debt in the future.
If you are going to be filing for bankruptcy, think about filing Chapter 13. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. This repayment period usually lasts from three to five years. If you make your payments faithfully during that time, any remaining unsecured debt will be eliminated. Just know that missing one payment could cause your case to be dismissed.