While bankruptcy is often a last-resort measure, sometimes it’s simply unavoidable. Depending on personal circumstances, personal bankruptcy can be the only sensible option, despite the hit it levies on credit availability. Read this article to learn more about filing bankruptcy and the consequences from doing so.
Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. You must avoid the temptation to conceal any valuables, money or other assets from the courts. If they find that you have lied, you may be faced with fines, penalties or the inability to file in the future.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. If you find yourself needing to file for bankruptcy it is important to familiarize yourself with the state laws. Every state is different when it comes to dealing with bankruptcy. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. It is important to be cognizant of the laws in your state before filing for bankruptcy.
Do not be afraid to remind your attorney of important specifics of your case. Don’t assume that they’ll remember something important later without having a reminder. Speak up if something is troubling you, as this is your future we are talking about here.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. There are some assets that cannot be seized through bankruptcy, and the law lists those assets. Be sure that you study this list. Make yourself aware of any assets you have that could be seized. If you are not aware of the rules, you could be setting yourself up for a lot of stress when your most important possessions are taken in the bankruptcy.
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. Ensure that you have a meeting with a real lawyer instead of an assistant, since they can provide the best advice. Look for a lawyer who you can relate to.
Always be honest with the information you give about your finances. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
Chapter 7
Take into consideration all the ramifications of a Chapter 7 bankruptcy. Filing for this can impact any co-debtors, such as friends or family. When filing for Chapter 7, you won’t be responsible legally for debt signed by co-debtors and yourself. However, the creditors could come after your co-signer and demand full payment for the debt.
If you decide to file for bankruptcy, it’s important that you’re educated about your rights. You might hear from your creditors that your debts cannot be canceled through bankruptcy. There are a few debts that cannot be cleared, such as student loans and child support, but be sure to know the details when dealing with debt collectors. If your creditors are telling you any other kind of debts cannot be cancelled, get a written proof and send it to the general office of your state’s attorney to report this illegal behavior.
You are going to get found out and get in trouble if you don’t disclose all your assets, so be totally honest from the beginning. It is necessary to be open regarding both the positive and negative aspects of your financial life. Do not hold anything in secret and create a strategy on how you will deal with the things you are facing.
Do not use the word “shame”, if you go bankrupt. Many people get feeling of guilt when going through bankruptcy. But, there is nothing positive about feeling this way and it can actually affect your mental state. Keeping an optimistic view as you deal with your financial woes is the most productive way of dealing with a bankruptcy.
Bankruptcy can be overwhelming to most people, and can be quite stressful. The best way to lessen this stress is to employ a lawyer, who can handle most of it for you. Be sure that you consider more than the expense when you choose a lawyer. Your attorney does not need to cost a lot, but they do need to have a lot of experience. Rely on word-of-mouth referrals from others who have filed for bankruptcy, check the BBB, and take advantage of free consultation offers. Attending a court hearing will give you experience as to how lawyers handle these cases.
Be sure you know the bankruptcy laws before you think about filing. For instance, you may not be aware that a filer is forbidden from transferring assets from his or her name for one full year before the petition is filed. Also, it is illegal to load up your credit cards with debt right before filing occurs.
You should be able to meet with a specialized lawyer for free to ask your questions. The majority of lawyers offer their first consult at no cost, so ensure you meet with several to find one that you like. Do not make any final decisions until every question you have has been answered. You can think about your decision before making a commitment. If you’re unsure, don’t hesitate to talk to multiple bankruptcy lawyers.
When thinking about filing for bankruptcy, it is best not to waste precious time. It might seem a little scary, but if you wait forever to act, you’ll just be waiting that much longer once you do ultimately file. Speaking with a professional quickly will provide you with the advice you need before things spiral out of control.
Typically, people who have faced bankruptcy swear off credit cards. This is not wise because you need to rebuild a good credit file. If you never use credit, you won’t be able to rebuild the good credit that you will need to make future purchases. Start with one credit card to get your credit going in the right direction.
Before you decide to file a bankruptcy claim, you need to first come to realization that it’s time to start living a more financially responsible life. Do not increase current debt or incur new debt prior to bankruptcy. Creditors and judges look at your current and past financial history when they make a decision about your personal bankruptcy. It is important to show that you are committed to acting in a responsible manner going forward.
Be sure your home is well protected. Filing for bankruptcy does not mean you have to lose your home. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.
You don’t necessarily have to forfeit all your assets when you file for bankruptcy. Many times you will be allowed to keep your personal property. This covers items such as clothing, jewelry, electronics and household furnishings. Depending on the state you are from, what kind of bankruptcy you’re filing, and your specific case, you could be allowed to keep bigger items, like your car or house.
This article has made it known that bankruptcy is something you may be able to turn to. It should be said that all other avenues should be explored before damaging your credit with a bankruptcy. As long as you’re properly informed about which moves to take and when, you should have little trouble navigating the process and ultimately restructuring your credit.