Being severely in debt is a very frightening experience. In some cases, what started as a manageable amount of debt turns into an insurmountable challenge. By the time it gets to the point of overwhelming you, fixing it is difficult. In some situations, filing for bankruptcy might be the best option.
It’s important that you understand what bankruptcy is and how it will change your life before you attempt to file a claim. You can learn a lot on the U.S. Department of Justice, American Bankruptcy Institute, along with many other websites can provide you with the information you need. The more you know, the better equipped you’ll be to make the wise decisions needed for a successful bankruptcy.
Learn as much as you can about bankruptcy by going to informational websites. The US DOJ, the NACBA, and the ABI all have useful information. The greater your body of knowledge, the better prepared you will be to make the decision of whether or not to file and to make certain that if you do file, the process is a smooth one.
Before filing for personal bankruptcy, make sure you are doing the right thing. You can find services like counseling for credit that consumers can use. Bankruptcy will leave a permanent scar on your credit report and before you take this huge step, you should search through every available option first, to help try and limit the damage to your credit.
Be sure to remind your lawyer if it seems that some details of your situation are forgotten. Don’t assume that they’ll remember something important later without having a reminder. Don’t fear speaking up since it affects your case and future.
Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. To find an itemized list detailing assets exempt from bankruptcy, find the Bankruptcy Code. It is vital that you completely understand which assets are protected and which assets can be seized prior to filing bankruptcy. This will ensure that you do not have any surprises once you have filed bankruptcy.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. If the tax can be discharged, so can the debt. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
Safeguard your most valuable asset–your home. Filing for bankruptcy will not always result in losing your home. If your home value has gone down, or if there’s a second mortgage, you might be able to keep it. You could also check out the homestead exemption. This lets you continue living in your house, depending on whether you meet certain financial requirements.
Chapter 13
Learn what you can about Chapter 13 bankruptcies. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Remember that if you even miss one payment that’s due under this plan, the court could dismiss the whole case.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. Remember that if you hide your valuable assets or income from your bankruptcy trustee, you may risk a number of penalties and complications. Among these is the possibility that you could be blocked from ever filing again.
Before you file for personal bankruptcy, weigh all of your options. Speak with an attorney who specializes in bankruptcy to find out if alternatives, such as a debt repayment plan or a reduction of your interest rates, might be better for you. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. These plans allow you a longer pay off period by extending the term of the loan, reducing the rate of interest or forgiving late fees. Many times creditors are happy to work with you to ensure that you will repay your loan.
Make sure the time is right when you file a bankruptcy claim. When you time things right, it does you good, especially when you’re filing for personal bankruptcy. There are occasions where it pays to delay and others where a quick decision is the best option. Speak with a bankruptcy lawyer about when the best time is to file for your specific needs.
Filing for bankruptcy can cause stress. To help yourself deal with this stressful situation, make sure you hire a legitimate attorney. Don’t skimp when hiring a good lawyer. 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. You might even go to a bankruptcy hearing to watch how a lawyer presents his case.
Getting unsecured credit post-bankruptcy will likely be difficult. In this event, you should attempt to apply for a secured card or two. You can exhibit your desire to rebuild your credit this way. Once you’ve built up a history of on-time payments, you may start getting unsecured credit again.
Do not get sizable cash advances from credit cards before filing for bankruptcy because you think the debt from the cards will be erased., Doing so constitutes fraud. You can easily be ordered to repay all of this money, by the courts.
Don’t put off filing for bankruptcy until you are in dire straits. Yes, it is hard to admit that you need help; however, the longer you wait the deeper in debt you get. Making use of a bankruptcy pro immediately can make the difference in success and failure in bankruptcy court.
Know that bankruptcy can be much better for your finances than missing payments or making late payments on debts. Bankruptcies can remain on your credit reports for 10 years, you can jump right into repairing your credit. Among the advantages of bankruptcy is that of a clean slate.
Do not give up. Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. Filing for bankruptcy may allow you to regain ownership of recently repossessed property. Get the advice of a qualified attorney who can advise you about ways to accomplish this.
After filing for bankruptcy, many individuals vow they will avoid the use of credit cards and all forms of credit. This isn’t wise since you need to use credit to build credit. Avoiding credit altogether prevents you from rebuilding your credit standing, and will therefore serve as an obstacle when you wish to finance a house or a vehicle. To start, use one credit card sparingly and pay it off in full each month.
List each of your debts clearly and efficiently. This will be included in your bankruptcy filing, so include every entity that you know you owe money to. Always go through your statements and get exact numbers. It can be difficult or even impossible to discharge your debts if you report them inaccurately; be sure that you double check your figures.
There are times when life just seems to happen without you having much control over it. Yet, you can take better control of your future and plan out how you are going to secure your finances, for life. Use this information to make a fresh start!
Be sure to enlist the help of a lawyer if you’re going to be filing for bankruptcy. Bankruptcy can be highly confusing and stressful, and you need an unbiased partner who can help simplify the process. Choose an attorney versed in personal bankruptcy to make sure you don’t make mistakes.