These days, the word “bankruptcy” is about as common as the word “the.” This is due to the current financial climate. Before you begin to file bankruptcy, it’s imperative that you know how it works so you can make wise decisions. This article can help you with that.
It’s important that you understand what bankruptcy is and how it will change your life before you attempt to file a claim. Many sites, including the U.S. Some valuable resources include the U.S. Dept of Justice and American Bankruptcy Institute. 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.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. If you are in this position, you need to be familiar with the laws in your area. Each state has its own set of rules regarding bankruptcy. Your home is safe in some states, but in others it’s not. Be aware of bankruptcy laws before filing your claim.
Don’t use a credit card to pay off your taxes before filing for bankruptcy. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. If the tax can be discharged, so can the debt. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
As filing bankruptcy becomes more of a reality, don’t use your entire savings or your retirement funds to pay creditors or attempt to resolve insolvency. Retirement accounts should never be accessed unless all other options have been exhausted. Although you may need to tap into your savings, you should not use up all of it right now and jeopardize the financial security of your future.
Keep at it! Certain property cannot be repossessed while you are in the process of filing for bankruptcy so be sure to learn about the laws in your state. If you have any property in repossession that was taken less than three months before filing for bankruptcy, then there are good odds that you can get your property back. A qualified bankruptcy attorney can walk you through the petition process.
Don’t pay for an attorney consultation and ask him or her anything you want to know. Since most attorneys offer free consultations, meet with a few attorneys before deciding who to hire. Don’t hire an attorney who fails to address all your concerns and questions. There is no need to offer an immediate hire, so take your time. You have lots of time for consulting with other lawyers.
Consider other alternatives before filing for bankruptcy. For example, you want to look into credit counseling. This is the best option for small debts. You may also find people will allow you to make lower payments. If that happens, get records of the debt modifications.
There are two different kinds of personal bankruptcy you can file for: Chapter 7 and Chapter 13. Learn the benefits and drawbacks of each type before deciding which is right for you. If you are confused by what you find, be sure to ask your attorney to explain anything that is unclear before you make your decision about filing.
Chapter 13
Never forget that you still deserve to enjoy life while you go through the bankruptcy process. The process of filing for bankruptcy can make people a nervous wreck. That stress can cause depression, if you don’t take care to avoid it. Life will get better; you just need to make it through the bankruptcy process.
You could see about filing for Chapter 13 personal bankruptcy. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. You can secure your home under Chapter 13 and pay your debts with a payment plan. The window for Chapter 13 repayments is typically 3-5 years. At the end of this time, any unsecured debt is discharged. However, if you miss even one payment, the court will dismiss your entire case.
Make time to visit with family and friends during the bankruptcy process. Going through a bankruptcy is never easy. It is often overwhelming, and not quick. Some people may feel embarrassed or feel their self-esteem has taken a beating from it. Many people decide to hide away from the world until the process is over. This isn’t true though because when you isolate yourself you will just start to feel worse and may become depressed. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
There are circumstances where you are able to keep your car during a bankruptcy so be sure to ask your lawyer about possibly reducing the payments. Most of the time Chapter 7 bankruptcy will allow your payments to be lowered. If you meet the criteria specific to your state, it may be a good option to consider.
During a Chapter 13 bankruptcy, you may still be able to get a mortgage or car loan. However, it will be a longer and more arduous task. Your bankruptcy custodian will need to approve the loan. Draw up a budget, demonstrating that you can afford the new loan payment. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
If you have a co-debtor, consider the ramifications that filing a Chapter 7 bankruptcy will have. A Chapter 7 bankruptcy will relieve you of your legal responsibility to pay any joint debts. However, creditors will want to hold your co-signer responsible completely.
You can still take out a car loan or mortgage while you are in Chapter 13 bankruptcy. Of course, it’s difficult. You will have to see your trustee and the approval for this new loan. Draw a budget up and show how you can pay the newer loan payment. It will also be necessary to show why a new purchase needs to be made.
Before filing for bankruptcy, establish the fact firmly in your mind that you have nothing to be ashamed of. A lot of people have a negative opinion of bankruptcy, mostly because they misunderstand this procedure. These are useless emotions, however, and can be harmful to your mental state. The best way of dealing with bankruptcy is to keep a positive attitude during this time of financial upset.
Don’t wait when you’re thinking about filing for bankruptcy and have been for a while. It can be difficult to admit you’re in need of help, but your debt will only grow larger if you put off your decision. A qualified bankruptcy lawyer can give you advice about filing for bankruptcy and help you weigh other options.
Don’t wait until the last minute to file bankruptcy. It is all too common for people to hope that their financial difficulties will disappear if they don’t give them any attention. Debt can become a big problem rapidly, and if you fail to handle it, you can face foreclosure or garnishment of wages. As soon as you know that you are too far over your head, make the move to call an attorney skilled in bankruptcy court, to weigh your options.
As you can see, bankruptcy is quickly becoming more popular due to the poor state of our economy. So, use what you learned today so that you know what decisions to make while you contemplate filing for bankruptcy.