Bankruptcy is very common in today’s economic climate. The recent downturn in the economy has only exacerbated the situation. You need to educate yourself so that you can make wise decisions when it comes to filing bankruptcy. The below article will provide you with this wisdom.
Prior to filing for bankruptcy, be sure you have investigated all of your alternatives. There are other options available, such as credit counseling for consumers. Bankruptcy has a negative effect on your credit reports, in that it is permanently there. Before you take this step, make sure all your options have been considered.
Do not use your retirement fund or savings to pay off creditors. Avoid touching your retirement accounts whenever possible. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
When it soaks in that filing for personal bankruptcy, don’t use all of your retirement funds, or all of your savings to resolve insolvency or pay creditors. Leave your retirement accounts untouched unless there is absolutely no other alternative. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
Brush up on the latest bankruptcy regulations before you decide whether or not to file. This area of law is in constant flux and it is imperative that you know where the law stands at the time you file for your bankruptcy. To know what these changes are, go to your state’s website or contact the legislative offices.
It is important to know how Chapter 7 filings differ from Chapter 13 filings. There is a wealth of information online about each type of bankruptcy and their respective pluses and minuses. Go to a specialized lawyer to ask your questions and get some useful advice on what to do.
Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. You may have luck negotiating lower payments by dealing directly with creditors, but be sure to document any get and new agreement terms in writing from each creditor.
Avoid using bankruptcy as a last resort. It is all too common for people to hope that their financial difficulties will disappear if they don’t give them any attention. Debt can become a big problem rapidly, and if you fail to handle it, you can face foreclosure or garnishment of wages. As soon as you discover your debt is getting too big, immediately get hold of a bankruptcy attorney so that you can talk to him or her about your options.
Do your homework so you thoroughly understand the laws pertaining to bankruptcy before you file. For example, it is forbidden for an individual to transfer any assets away from the name of the filer within the twelve months preceding filing. Not only that, but the filer cannot lawfully accrue additional debt just prior to filing.
Whenever you file a petition for bankruptcy, do not leave out any information about your finances or assets. If the court thinks you are attempting to conceal information, your petition could be denied. Add absolutely everything to your list, including small amounts. This includes income from second or part time jobs, vehicles and loans.
There are circumstances where you are able to keep your car during a bankruptcy so be sure to ask your lawyer about possibly reducing the payments. Chapter 7 bankruptcy is one of the most common and effective. The vehicle must have been obtained more than 90 days before filing and be a loan with high interest. You must also have consistent work history.
Many people file for bankruptcy every year, mainly because the economy is bad for everyone. To ensure that you make great decisions when dealing with bankruptcy, utilize the excellent advice given above.