In order to file a bankruptcy claim, you will run into more than a couple of complicated hurdles to jump. All types of bankruptcy exist. The kind that you select depends on your finances and your debt. The most important step you can take, of course, is to learn what you can about the process before ultimately deciding one way or the other. This article is a great place to start learning this information.
Lots of people have to claim bankruptcy when their bills are larger than their income. If this is your case, you should do some research about bankruptcy laws in your state. Different states have different laws regarding bankruptcy. In some areas, your residence may be completely exempt, but in others, it will not be. Be sure to have some familiarity with the law in your jurisdiction.
Do not pay your taxes with credit cards that will be canceled when you 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. If the tax can be discharged, so can the debt. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
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. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. Remember that if you can discharge the tax you can discharge the debt. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
It should go without saying, but refrain from lying in your bankruptcy filings. Don’t hide income or assets from your lawyer or the bankruptcy trustee or you may find yourself in legal trouble.
When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. Some companies just want to take advantage of you, so it is important that you have help from someone you trust.
Know and understand the difference between filing for Chapter 7 bankruptcy versus Chapter 13 bankruptcy. Take the time to learn about them extensively, and then figure out which one will be best for your particular situation. Go to a specialized lawyer to ask your questions and get some useful advice on what to do.
Before you file for bankruptcy, find out which of your assets will be exempt from seizure. The federal statutes covering bankruptcy can tell you exactly which assets are exempt from forfeiture to pay off creditors. It’s crucial to read that list before filing to see which of your prized possessions can be seized. If you are not aware of the rules, you could be setting yourself up for a lot of stress when your most important possessions are taken in the bankruptcy.
You are now aware that filing for bankruptcy is a choice that is one you should think through thoroughly prior to committing. If you feel that it is best for you to file for bankruptcy, a qualified attorney can be of great assistance, ensuring you make the best choices.