Do not approach personal bankruptcy in a capricious manner. It is vital that you know everything that can happen when you file for bankruptcy. The information in this article will help you separate fact from fiction. Whenever you have a difficult decision to make, you can use information like what is in this article to make a smart choice.
Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If this describes your situation, it makes sense to become familiar with relevant laws. Every state has a separate law having to do with bankruptcy. Your home is safe in some states, but in others it’s not. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
Lots of people have to claim bankruptcy when their bills are larger than their income. If this is your case, you should do some research about bankruptcy laws in your state. Laws differ from one state to the other. For instance, some states protect you from losing your home in a bankruptcy, but others do not. Familiarize yourself with the bankruptcy laws of your state prior to filing.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. To find an itemized list detailing assets exempt from bankruptcy, find the Bankruptcy Code. It is important to be aware of this list so you will know what assets are saved. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
Be sure to enlist the help of a lawyer if you’re going to be filing for bankruptcy. The topic of bankruptcy is a complicated one and it is important that you know all about it. Your lawyer will make sure that the filings are correct and help you navigate the complex process of filing for bankruptcy.
Chapter 13
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Should you choose Chapter 7, your total debt load will be erased. With very few exceptions, the connections between you and your creditors will be severed. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. Both options have advantages and drawbacks, so do your research before deciding.
Since it is possible to obtain a free consultation from the majority of bankruptcy lawyers, meet with a few of them prior to choosing one. Talk to the lawyer and not his assistant, who may not be legally able to help you. By shopping lawyers, you will be more likely to find one that makes you comfortable about the process.
Thing about filing a Chapter 13 bankruptcy. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. You can secure your home under Chapter 13 and pay your debts with a payment plan. The plan is usually for a term of three to five years, and a discharge will be granted at the end of that term. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
Do some research to find out which assets you could lose by filing for personal bankruptcy. The Bankruptcy Code provides a listing of the various asset types that are not included in the bankruptcy 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 aren’t aware of this, you could lose some assets that you value.
Chapter 7
Keep in mind that filing for Chapter 7 bankruptcy may affect other people than just you, including family members, and in some cases, business associates. You will be freed of responsibility for debts that you share if you make a successful Chapter 7 filing. This does not dissolve any co-signers of the debt, and your creditors will continue to try and collect from them.
There are quite a few ways to file for bankruptcy. Don’t let the amount of information overwhelm you! Take a few minutes to think about these tips. You can make more thoughtful decisions this way.
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. Chapter 7 bankruptcy completely wipes out your debt. All creditor relationships will be severed. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. When choosing the type of personal bankruptcy that is correct for you, it is very important that you know the differences.