With the state of the economy, job market, and stock market, bankruptcy has become more and more common. Most people will put all the blame on the poor economy. Before you choose to file for bankruptcy, it is important that you know the ins and outs of the subject, in order to ensure you make the best decisions. Read this article to learn more about bankruptcy.
Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. The lawyer representing you when you file needs to have full knowledge of your financial situation. Be completely honest in your paperwork to avoid a situation that may end in severe punishment.
Make sure you’ve exhausted all other options prior to declaring bankruptcy. You have other options available like consumer credit counselling services. Be sure to consider all options before filing for personal bankruptcy, as this will take a large toll on your credit score for the next ten years.
Before filling for bankruptcy, determine which assets will be exempted from seizure. The Bankruptcy Code lists assets considered exempt from being affected by bankruptcy. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. If you aren’t aware of this, you could lose some assets that you value.
There are differences between Chapter 13 bankruptcy and Chapter 7; be sure to familiarize yourself with both. Weigh all the information you can find on- and off-line to make an educated decision. Go to a specialized lawyer to ask your questions and get some useful advice on what to do.
Speak to a bankruptcy attorney about what new laws may be going into effect before your bankruptcy filing. These laws change regularly and you should stay up-to-date so you can make the best decisions. Your state will have a website to check, or a number you can call, to learn the latest changes in the bankruptcy laws.
If you are making more money than you owe, bankruptcy should not even be an option. Bankruptcy might seem like a good way to get out of paying your bills, but it will devastate your credit for the next ten years.
Chapter 7
If you are moving forward with a Chapter 7 bankruptcy, you need to learn how that can negatively affect anyone who shares loans with you. If you choose Chapter 7, you are no longer responsible for joint debts. Although, your creditors may insist that the co-debtor pay off the entire debt.
When you do file for bankruptcy, make sure you know your rights. Don’t take a debt collectors word for it simply because they tell you that you can’t have many or all of your debts erased by bankruptcy. Only a few kinds of debt, like student loans or child support, are ineligible for bankruptcy. If a bill collector attempts to say their bill cannot be discharged, look it up. If they are wrong, report them.
Know your bankruptcy rights. You might hear from your creditors that your debts cannot be canceled through bankruptcy. Most loans can be discharged outside of certain things, like child support or loans you are paying back due to student lending. If a collector tells you your debt won’t be discharged in your bankruptcy and you know that it will, report the collector to the attorney general’s office in your state.
As said previously, bankruptcy is a popular topic due to the declining economy. To help you make good decisions regarding bankruptcy, consult with this article and use the knowledge to your advantage.