The decision to file bankruptcy is difficult, but sometimes unavoidable. When going through this process it is best you have a lot of knowledge on what is about to take place. Keep reading for some solid wisdom from people who have themselves gone bankrupt.
Lots of people have to claim bankruptcy when their bills are larger than their income. If this sounds like you, start familiarizing yourself with your state laws. Every state is different when it comes to dealing with bankruptcy. Your home and other major assets may be protected in your state, while they are vulnerable in other states. It is important to understand the laws in your state before filing for bankruptcy.
Lots of people have to claim bankruptcy when their bills are larger than their income. If this sounds like you, start familiarizing yourself with your state laws. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. You may find your home is safeguarded in one state, while in another it isn’t. You should be familiar with the laws for your state before filing for bankruptcy.
Knowledge is power when you’re considering bankrupcy; there are many websites available to help you. The United States Department of Justice and American Bankruptcy Institute are both sites that provide free advice. You need to spend some time gathering valuable information so you can file your bankruptcy with confidence.
Don’t feel bad if you need to remind your attorney about any specifics of your case. Don’t assume that he will remember something you told him weeks ago. It is in your best interest to speak out. You are in control of the outcome of your bankruptcy.
Look for a bankruptcy lawyer that comes from a personal recommendation instead of someone random on the Internet or in the yellow pages. There are lots of unsavory companies and lawyers out there who prey on people who are in desperate straits. It is up to you to find someone that is trustworthy and can make the process go smoothly.
If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
Chapter 7
Be sure you know how Chapter 7 and Chapter 13 differ. In Chapter 7 most of your outstanding accounts will essentially be erased. All creditor relationships will be severed. Bankruptcy under the rules of Chapter 13, on the other hand, require you to work out a payment arrangement to pay back the agreed upon amounts. It is vital that you know the differences between these types of bankruptcies, in order to find the option that’s best for you.
Take advantage of free consultations with lawyers and the ability to sift through and find the right one. Be certain you talk to the lawyer, himself, instead of a paralegal or assistant; those people aren’t allowed to give legal advice. Look for a lawyer who you can relate to.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. You can find services like counseling for credit that consumers can use. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
It is important to know how Chapter 7 filings differ from Chapter 13 filings. By researching each type, you can begin to understand which method is right for you. If you have trouble understanding the wealth of information, talk to your lawyer so he or she can help you make an informed choice.
Consider Chapter 13 bankruptcy for your filing. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. Not only can you repay your debts through consolidation, personal property can be kept, as well as real estate. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. However, if you miss even one payment, the court will dismiss your entire case.
Declaring bankruptcy is not something most people aspire to, but can be unavoidable. Having read the preceding piece, you now possess critical insight and knowledge offered by those with actual prior bankruptcy experience. You can take comfort in the fact that others have been in this situation before you, so take heed from their experiences to help you deal with your own.
Never lie about anything in your bankruptcy petition. As long as you are not hiding income or assets from the courts, you can ensure that there are no difficulties with your petition. This will save you from having your petition dismissed and your debts dropped from re-filing.