Anything leading you to going through bankruptcy is not a happy tale, but the life you live after might be. The whole point is to wipe the slate clean and have a new chance at life. Continue ahead to learn how you can smooth out the bankruptcy process so it’s not a financial disaster.
Credit Card
Lots of people have to claim bankruptcy when their bills are larger than their income. If this is the case for you, you should begin to investigate the legislation in your state. Every state is different when it comes to dealing with bankruptcy. Your home is safe in some states, but in others it’s not. Before filing for personal bankruptcy, be certain that you are familiar with the laws.
Don’t use a credit card to pay off your taxes before filing for bankruptcy. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. This makes using a credit care irrelevant, since bankruptcy will discharge it.
Always remind your lawyer of specifics that are important to your case. Don’t assume that they will recall every detail that you go over with them without a friendly reminder. Speak up, because it is your future on the line.
Keep with what you have decided to do. You might even be able to get back secured property that has been repossessed in the 90 days before filing. If your personal property was repossessed within 90 days before your bankruptcy filing, you may have a chance of getting it back. A qualified bankruptcy attorney can walk you through the petition process.
A key tip for those filing a personal bankruptcy petition is to always be completely honest in all documentation. You can lose the right to file bankruptcy now or in the future if you try to withhold information about your assets and income. So it is critical that you disclose everything honestly to to avoid that and any other penalties the trustee might impose if he discovered your attempt to hide information from the court.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Most lawyers provide a consultation for free, so consult with many of them before picking which one you want to hire. Make a choice only if you have received good answers to all the questions and concerns you brought to the table. It is not necessary to decide immediately after your consultation. Consulting with several attorneys will also help you find someone you trust.
Learn the newest bankruptcy laws before filing. The laws are constantly undergoing changes, so you must stay on top of them if you are going to file for personal bankruptcy correctly. To find out about these changes, you can look at your state’s legislation website or contact their office.
Protect your house. Losing your home is thought of as common in bankruptcy cases, but it is by no means inevitable. Depending on whether the value of your home has decreased or if you have a second mortgage on the home, you may end up keeping it. Check to see if you pass the requirements necessary to file for a homestead exemption.
Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. The Bankruptcy Code has lists of various asset types that are exempt during the 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. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
Chapter 7
Remember that filing for Chapter 7 personal bankruptcy will not just affect you. Think about the effect it will have on business associates, friends and family or anyone else who may be a co-signer with you. When filing Chapter 7, you are not legally responsible for the debts in your name. Your creditors can then come after your co-debtor for full repayment of the debt.
Rest assured, when you file for Chapter 13 bankruptcy, you still have the ability to take out mortgage and car loans. However, it will be a longer and more arduous task. First, your trustee will have to approve the loan. You will need to make a budget and prove that you will be able to afford your new loan payments. The odds are also good that you will be asked exactly why you’re purchasing a new item. Make sure you have a good reason.
Keep working to improve your situation. Filing a bankruptcy petition might facilitate the return of your property, including cards, electronics or other items that may have been repossessed. If it has been fewer than 90 days since you filed for bankruptcy, it is possible for you to get repossessed property back. Consult with a lawyer that can walk you through the filing process.
As mentioned earlier, the events that drive anyone to declaring financial bankruptcy are not a happy story. But, that does not mean that your post-bankruptcy life cannot be fantastic. The truth is, that by using the tips in this piece, it is possible to make bankruptcy a positive experience that gives you the fresh start you need.