Although some people think filing for bankruptcy is only for losers, they are quick to dismiss the idea when they are faced with it. Sudden loss of income or major life changes can result in situations where bankruptcy may be the only out. If you are in this situation, this article will help you learn more about bankruptcy.
Millions of Americans file for bankruptcy each year because they can not pay their bills. If you’re in this position, it is a good thing to familiarize yourself with the laws that apply in your area. Bankruptcy rules vary by jurisdiction. In some areas, your residence may be completely exempt, but in others, it will not be. Be aware of bankruptcy laws before filing your claim.
Be sure you’re doing what’s right before you file for bankruptcy. You have other options available like consumer credit counselling services. 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.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Always be honest when filling out paperwork. Do not hide any income or assets or go on a spending spree before filing for bankruptcy: the court will find out and will not have a positive opinion of you.
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. If this happens to you, think about applying for a couple of secured credit cards. This will allow you to start building a good credit history while minimizing the bank’s risk. After some time passes they may be willing to offer you unsecured credit.
If you are seriously thinking of filing bankruptcy, make sure that you contact an attorney. There are a lot of things to do during bankruptcy and that may be hard for you to understand on your own. A lawyer that specializes in bankruptcy can make sure you are following the correct procedures in your filing.
If you can, get a word-of-mouth referral for a lawyer. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
When filing for bankruptcy it is crucial that you are candid and not concealing any liabilities or assets, as it will only show up in the future. Whoever provides your legal consultation must be privy to all of your financial information. Being honest is both the right thing to do and, moreover, it is required by law.
Do not despair, as it’s not the end of the world. Many times you can get repossess property back once bankruptcy has been filed. Filing for bankruptcy may allow you to regain ownership of recently repossessed property. Speak to a lawyer who will be able to help you file the necessary paperwork.
Learn all the latest laws before you file bankruptcy. Bankruptcy laws are in constant flux, so just because you knew the law last year doesn’t mean that the laws will be the same this year. Your state will have a website to check, or a number you can call, to learn the latest changes in the bankruptcy laws.
You might have to file for bankruptcy if nothing else has worked for your financial situation. Don’t be overly stressed, because there are many things that you don’t have control over. Although the bankruptcy process can last several months, you will be less stressed out if you understand everything that is happening.