Declaring bankruptcy is anything but easy. All types of bankruptcy exist. The kind that you select depends on your finances and your debt. Prior to filing your petition, you really need to gain an understanding of how personal bankruptcies work. Here are a few wise tips to help you in your decision.
Before making the decision to file for bankruptcy, be sure to do some research and learn all you can about the subject. There are many websites available that offer this information. Many sites, including the U.S. Department of Justice, the American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys, all provide valuable information. As with everything in life, the more you know about filing a claim, the better off you’ll be. You can properly prepare when you know what you’re preparing for.
Do not attempt to pay your taxes with your credit cards and subsequently 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. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. You should always keep money saved for worse times. While dipping into your savings is likely to be necessary, avoid wiping it out completely to prevent leaving yourself with little financial security in the future.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. The federal statutes covering bankruptcy can tell you exactly which assets are exempt from forfeiture to pay off creditors. You can determine exactly which of your possessions are at risk by consulting this list before you file. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
You should not have to pay for an initial legal consultation, and such meetings are great opportunities to ask lots of questions. Free consultations are standard practice among bankruptcy lawyers, so interview multiple candidates before making a final decision. Therefore consult with different lawyers and get a feel for them, then decide which one suits your needs After the consultation, you are not immediately required to come up with a decision. This allows you time to speak with numerous lawyers.
When it comes to informing your attorney about your case, don’t be fearful. Don’t assume that they will recall every detail that you go over with them without a friendly reminder. It is in your best interest to speak out. You are in control of the outcome of your bankruptcy.
Learn of new laws prior to deciding to file for bankruptcy. It can be tough to keep up with them on your own, and because they change often, a bankruptcy attorney can help you keep track for the sake of your filing process. Your state’s legislative offices or website will have up-to-date information about these changes.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Take the time to learn about them extensively, and then figure out which one will be best for your particular situation. If you are confused by what you find, be sure to ask your attorney to explain anything that is unclear before you make your decision about filing.
Don’t file bankruptcy if you can afford to pay your debts. The cost to your credit history far outweighs the simplicity of the easy-out bankruptcy. This is a hard pill to swallow for many.
After you have declared bankruptcy, you may have a hard time being approved for unsecured credit. If you are in this situation, applying for a secured card may be the answer. This at least shows you are making an honest attempt at reestablishing your credit worthiness. If you pay your secured card off on time, you’ll eventually find that companies will start offering you unsecured credit.
Talk to an attorney about reducing your car payments so that you can keep your vehicle. Chapter 7 usually can help payments be lowered. Your car must have been purchased more than 910 days prior to filing, be a high interest loan, and you must have had a steady work history for this to work.
Chapter 7
Remember that filing for Chapter 7 personal bankruptcy will not just affect you. Think about the effect it will have on business associates, friends and family or anyone else who may be a co-signer with you. When you file a Chapter 7, your debts will be dissolved. But, creditors will ask for the money from your co-debtor.
You must be entirely candid when it comes to declaring assets and obligations in your bankruptcy petition. It is important that you are completely transparent, showing everything financial that needs to be known. Don’t hold back information and create a strategy so you can deal with what’s really happening.
Now after reading the above article you see that bankruptcy must be thought over extremely carefully before going through with it. If you feel that it is your best option for your current financial state, you should contact an experienced bankruptcy lawyer who can advise you in this turning point in your life.