Everyone is suffering from the bad economy. The cycle of a tough economy leads to people losing jobs and going into debt. Debts usually end in bankruptcy which isn’t good. This article can help you or someone you care about if bankruptcy is a consideration.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. This makes using a credit care irrelevant, since bankruptcy will discharge it.
Prior to filing for bankruptcy, discover which assets cannot be seized. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. Be sure that you study this list. Make yourself aware of any assets you have that could be seized. You wouldn’t want to unexpectedly lose any possessions you treasure.
Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. Don’t touch retirement accounts unless you don’t have a choice. If you have to use a portion of your savings, make sure that you save some to ensure that you are financially secure in the future.
Rather than checking online, try to get recommendations from friends or family about a suitable bankruptcy attorney. There are various companies that prey on the financially desperate, so you need to find someone you can trust to ensure the process goes smoothly,
When you do meet with a lawyer make sure that they answer all of your questions and that they do not charge you for consultation alone. Most attorneys offer a free consultation which you should take advantage of. Meet with a few before finalizing your plans. Decide which lawyer you like best buy reviewing all of the lawyers’ answers to your questions. Choose the lawyer who addressed your issues the best. It is not necessary to make a final decision right away. So you have sufficient time to speak with a number of lawyers.
When you do meet with a lawyer make sure that they answer all of your questions and that they do not charge you for consultation alone. Since most attorneys offer free consultations, meet with a few attorneys before deciding who to hire. Only make your decision if all your questions and concerns are adequately addressed. It is not necessary to make a final decision right away. This allows you time to speak with numerous lawyers.
If bankruptcy is an option for you, secure the services of an attorney. Personal bankruptcies are detailed and complex processes, and you may miss something that costs you money. A bankruptcy attorney can help yo,u and make certain you can do things the right way.
State Legislature
Stay up to date with any new bankruptcy filing laws. The laws are constantly undergoing changes, so you must stay on top of them if you are going to file for personal bankruptcy correctly. Review the state legislature web site or contact the state legislature office to keep abreast of changes in the law.
Consider other alternatives before filing for bankruptcy. For example, if you only have a little bit of debt, you might be better off if you went through consumer credit counseling. Some creditors will work with you to help you pay off your debt with lower interest rates, lower late fees, or an extended loan period.
If you have a co-debtor, consider the ramifications that filing a Chapter 7 bankruptcy will have. When filing for Chapter 7, you won’t be responsible legally for debt signed by co-debtors and yourself. So, in short, if you file bankruptcy, but they do not, they will be held completely responsible for your joint actions.
If you filed for Chapter 13 bankruptcy, you can still get a mortgage or a car loan. It is more difficult. You will need to go through various hoops in order to be approved for any new loan type. Create a budget and prove that you will be able to afford it. 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.
An understanding of your rights is important before filing for bankruptcy. Do not take debt collectors at their word when they tell you that a specific debt can’t be discharged through bankruptcy. There are not many debts that can not be bankrupted, student loans and child support for example. If you are unsure about specific types of debt, check the bankruptcy laws in your state or consult an attorney.
Take steps to ensure your home is protected. Losing your home is thought of as common in bankruptcy cases, but it is by no means inevitable. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. Another option is the homestead exemption that has certain income and financial requirements, but may also allow you to keep your home.
Make certain that you are fully aware of each and every bankruptcy law prior to even considering filing. For instance, a filer cannot transfer assets to someone else for at least a year before filing. It is also against the law to max out your credit cards before filing for bankruptcy.
Although the economy is slowly picking up, there are still many people left without jobs and a decent wage. Even if you do not have a lot of money, there are many ways to prevent filing for bankruptcy. Simply remain persistent and positive. Opportunities will eventually come your way. Keep these thoughts close and it will enable you to have a better chance of avoiding the need to file bankruptcy. Good luck to you.