Nowadays, more and more people are facing the sad reality that they have no choice but to file for bankruptcy. Not only the economy, mind you, but people’s spending habits are also to blame for the increase in claims filed. However, before you make the decision to file for personal bankruptcy, you should understand the filing process and thoroughly investigate whether it is the right choice for you. Read on to find insightful tips and information about bankruptcy filing.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. Bear this in mind; if the tax can be discharged, then the debt can be as well. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
As filing bankruptcy becomes more of a reality, don’t use your entire savings or your retirement funds to pay creditors or attempt to resolve insolvency. Avoid touching your retirement accounts whenever possible. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. It is possible to take advantage of other options, like consumer credit counseling. Bankruptcy stays on your credit for a whole decade, so if there are less drastic options that will solve your credit problems, it is in your best interest to make use of them.
Always be honest with the information you give about your finances. Not only is hiding income and assets wrong, it is also a crime.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. It’s crucial to read that list before filing to see which of your prized possessions can be seized. If you neglect this important step, you might be blindsided when a possession that is important to you is taken to repay creditors.
When filing for bankruptcy it is crucial that you are candid and not concealing any liabilities or assets, as it will only show up in the future. Good or bad, you must tell your bankruptcy attorney everything about your financial situation. Bankruptcy can be a chance to simplify your finances, but any schemes you employ to conceal the truth can ruin that chance for you.
Make sure you are completely honest when filing for bankruptcy. Hiding your assets is never wise. The lawyer representing you when you file needs to have full knowledge of your financial situation. Bankruptcy can be a chance to simplify your finances, but any schemes you employ to conceal the truth can ruin that chance for you.
If you are meeting with a lawyer to discuss bankruptcy, the initial consultation should be free so ask every question you have. Most lawyers provide a consultation for free, so consult with many of them before picking which one you want to hire. You should make a final decision only once all of the questions or concerns are sufficiently attended to. You do not have to give them your decision right after the consultation. Be sure to talk with a number of lawyers, and compare the information you receive.
Safeguard your home. Filing for bankruptcy does not mean you have to lose your home. It is entirely possible that you will be able to keep your home. This is dependent upon the your home’s value and whether or not you have taken a second mortgage. You can also investigate your state’s homestead exemption, an option that might enable you to keep your home if certain financial requirements are met.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. You can meet with a few lawyers before deciding on one. Most lawyers provide a free initial consultation. Make a decision when all your concerns and questions have been addressed well by one lawyer in particular. It is not necessary to decide immediately after your consultation. After your consultations, do some additional research on each attorney you consider qualified for the job.
Investigate your other alternatives before you decide you have to go with bankruptcy. You may be able to get away with going through debt consolidation to help make the payments easier to deal with. It can be quite stressful to undergo the lengthy process of filing for personal bankruptcy. Your credit will be impacted for many years. Thus, you must make certain that bankruptcy really is the only viable solution to your problems.
Do not forget to make quality time for friends and family members. Going through a bankruptcy is never easy. It takes time and a lot of people feel stressed and ashamed throughout this procedure. Many people don’t feel like socializing during the ordeal. This is not a good idea because staying alone could cause serious problems with depression. So, it is critical that you keep spending time with the ones you love, regardless of the current financial situation.
You should weigh every option before thinking about bankruptcy. Consult with a bankruptcy attorney to see if an interest rate reduction or debt repayment plan is an alternative to filing for bankruptcy. Loan modification can help you get out of foreclosure. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. Because of the fact that creditors would like to see their money they are likely to offer repayment plans versus not getting paid at all if you file for bankruptcy.
Stay abreast of new laws that may affect your bankruptcy if you decide 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 learn how the law has changed recently, go online and check your state’s website, or call the state government and ask them.
When you are looking at a Chapter 7 personal bankruptcy, you may well have debts to worry about for which you share responsibility with another person, such as a spouse, family member, or business partner. Speak to an attorney or read the bankruptcy laws in your state to find out if certain loans can be excluded from your filing. Sadly, this will not be the case for your co debtor. Your creditors may simply turn their attention to your hapless acquaintance.
File when the time is right. When it comes to filing for personal bankruptcy, timing is vital. Sometimes, you may need to file quickly; however, at other times, you should wait until the worst is over. Discuss your particular situation with your bankruptcy attorney to determine the best time to file.
As you must realize by now, bankruptcy is the topic of many dinner conversations lately because of the economy. In order to ensure the best decisions are made, use the tips in this article.
Check into less drastic solutions prior to declaring bankruptcy. For example, consumer credit counseling programs can help if your debt isn’t too large. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.