Filing for bankruptcy is nothing kid around about. It is important that you understand everything involved in filing process. Apply the advice within this article to have guidance in the right path.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. It is vital that you know the things on this list prior to filing for bankruptcy, in order to determine which of your possessions will be taken away. This will ensure that you do not have any surprises once you have filed bankruptcy.
You can find a wealth of information concerning personal bankruptcy resources available online to educate yourself thoroughly before you begin the process. Department of Justice and American Bankruptcy Institute are both sites that provide excellent information.
Don’t use credit cards to pay off your taxes before filing for bankruptcy. In most states, this debt won’t be discharged, and in the end you will be left owing the IRS a big sum of money. This makes using a credit care irrelevant, when it will just be discharged.
Hire a lawyer if you plan on filing for bankruptcy. You may not know everything you need to know in order to have a successful outcome of your case. A lawyer that specializes in bankruptcy can make sure you are following the correct procedures in your filing.
You have other options available like consumer credit that consumers can use. Bankruptcy will leave a permanent scar on your credit report and before you take this huge step, so if there are less drastic options that will solve your credit problems, you might want to explore all other choices so that your credit history is affected as minimally as possible.
Don’t be afraid to remind your attorney a heads-up about specific details he may not remember. You cannot expect your lawyer will remember every important detail without a reminder. This is your future in their hands, so never be nervous about speaking your mind.
Learn what you can about Chapter 13 bankruptcies. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. However, if you were to miss a payment, the court would dismiss your case right away.
Secured Card
You might find it difficult to obtain an unsecured credit card or line after filing for bankruptcy. If you find that to be the situation, applying for a secured card may be the answer. This will show people that you view rebuilding your credit rating. After using a secured card for a certain amount of time, you will then be able to acquire credit cards that are unsecured.
You may want to see if you can get lower payments on your vehicle if you want to keep it. Most of the time Chapter 7 bankruptcy will allow your payments to be lowered. In order for this to be considered, your car loan must be one with high interest, you need a solid work history and the car should have been bought 910 days or more prior to you filing.
The Bankruptcy Code includes a list of the types of assets considered exempt from the bankruptcy process. If you don’t read it, things could get ugly.
Don’t pay for an attorney consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Most lawyers provide a consultation for free, so talk to a few before making your decision. Only make a lawyer if you feel like your concerns and questions have been addressed. You do not have to give them your decision right after this consultation. This allows you extra time to speak with numerous lawyers.
Before you file for bankruptcy, make sure you understand your rights. Do not take debt collectors at their word when they tell you that a specific debt can’t be discharged through bankruptcy. There are not many debts that can not be bankrupted, student loans and child support for example. If you are told differently by a collector, research the information yourself. If you find they are in error, get the name of their company, phone number and any identifying info so you can report it to the attorney general in your area.
Before pulling the trigger on bankruptcy, be sure you have considered alternative options.If your debts are really not overwhelming, you may be able to manage it with credit counseling. You might also be able to negotiate lower payments yourself, but be sure to document any get and new agreement terms in writing from each creditor.
Unsecured Debt
Although it is tempting to toss out the idea of ever owning credit cards again, think again. In reality, though, credit cards can be a useful tool for people who are looking to rebuild their credit score after bankruptcy. If you don’t use your credit, you won’t be able to make big purchases on credit in the future. Begin with a credit card that has the very low limit and handle it extremely responsibly to begin healing your credit rating.
Consider if Chapter 13 bankruptcy for your filing. If your total debt is under $250,000 in unsecured debt, Chapter 13 may be right for you. This plan normally lasts from three to five years, your unsecured debt will be discharged. Keep in mind that missed payments will trigger dismissal of your whole case to get dismissed.
That stress can cause depression, if you don’t take the right steps in fighting it. Life is going to get better after you get this situation over with.
You don’t necessarily have to forfeit all your assets when you file for bankruptcy. You will be able to keep your personal property. You may keep personal items like jewelry, household furnishings, clothes and electronics. The personal items that you are allowed to keep will depend on your home state’s individual bankruptcy laws, your personal financial situation and the specific bankruptcy that you are filing for.
In order for this to be considered, you must have bought your car in excess of 910 days before filing, have a higher interest loan for it as well as a consistent work history.
As you have seen, filing for personal bankruptcy can be complicated. You may become overwhelmed with the process. If that begins to happen, always refer back to these tips. Take you time to figure out everything and keep these tips in mind. This makes it more likely that you will make rational decisions that will have long-term financial benefit.
Always document all the debts you want to be eliminated. If you forget to include any of your debts in the filing, you lose the chance to discharge them. It is up to you to ensure all things that need to be taken care of are written down, otherwise you will be stuck paying on things that weren’t discharged.