Just thinking about bankruptcy can make people fearful. The thought of losing their homes and cars and being overcome by debt is something they rightfully fear. If this sounds like you and you are experiencing these feelings right now, the advice here will be of help.
Millions of Americans file for bankruptcy each year because they can not pay their bills. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. Different states use different laws when it comes to bankruptcy. Some states protect your home, and others do not. Know what the laws are in your state before filing.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. Do not hide any income or assets or go on a spending spree before filing for bankruptcy: the court will find out and will not have a positive opinion of you.
Credit Cards
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. Because of this, transferring the debt to your credit card is pointless.
Ask those you know if they have an attorney to recommend, instead of finding one on the Internet or in the phone book. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
Make sure you are completely honest when filing for bankruptcy. Hiding your assets is never wise. The person you choose to file with needs to know both the good and bad aspects of your finances. You are in this situation, now help them to give you the best assistance possible to deal with it. You do that by giving full disclosure and holding nothing back.
Before you decide to file bankruptcy proceedings, determine which assets will be safe. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. Be sure that you study this list. Make yourself aware of any assets you have that could 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.
No good will come of trying to conceal your assets or your liabilities in the bankruptcy process; you want to be scrupulously honest when you declare bankruptcy. It is important that you are completely transparent, showing everything financial that needs to be known. Lay everything out on the table so that you and your lawyer can devise a plan to get you out of this mess.
Never pay to have a consultation with a lawyer, and ask a lot of questions. Most attorneys offer free consultations, so meet with a number of them before you retain one. Therefore consult with different lawyers and get a feel for them, then decide which one suits your needs You don’t have to make your decision right after this consultation. After your consultations, do some additional research on each attorney you consider qualified for the job.
There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Make sure you know what each entails so you can make the right choice. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. Any ties that you have with creditors will be dissolved. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. You must know about the different bankruptcy types, and how each can affect you.
Be sure your home is well protected. You don’t have to lose your home just because you are filing for bankruptcy. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. If you meet certain criteria, you may be able to retain ownership of your home even after filing for bankruptcy.
Bankruptcy can be quite frightening, so it is understandable that many people are afraid of it! While it may have frightened you previously, you should fear bankruptcy no longer after reading this article. Take the info shared here and apply it to your situation where needed so that you can move forward to a brighter future again.