You should never take the decision to file bankruptcy lightly.It is very important that you understand everything involved in filing personal bankruptcy. Use what you learn here to guide you towards making the right track.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If you are in this position, you need to be familiar with the laws in your area. You will find that each state has their own bankruptcy laws. Some states may protect you home, and some may not. It is important to understand the laws in your state before filing for bankruptcy.
Bankruptcy Laws
If this is happening to you, you should read up on the bankruptcy laws in your state. Each state has its own laws regarding bankruptcy. For instance, some states protect you from losing your home in a bankruptcy, while other states prohibit this. You should be aware of local bankruptcy laws before filing for bankruptcy.
Don’t fear reminding your attorney of any specific details of your case. Don’t just assume they already know and that they have these important details committed to memory or written down. Do not hesitate to speak up; this is your hearing and your future is on the line.
Do not pay your taxes with credit and petitioning for bankruptcy right after. In most states, this debt won’t be discharged, and you could be left owing a significant amount to the IRS. This makes using a credit care irrelevant, when it will just be discharged.
Avoid touching retirement funds until you have no other choice. While dipping into your savings is likely to be necessary, never completely wipe it out which would only leave you in worse financial shape in the future.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. Companies are constantly popping up, claiming to help, yet only seek to profit from your misery. In ensuring that your bankruptcy is as simple as possible, trusting your attorney makes a big difference.
The Bankruptcy Code lists the kinds of various assets which are exempted when it comes to the bankruptcy process. If you aren’t aware of this, things could get ugly.
The professional that helps you file with needs to know both the good and accurate picture of your finances.
Before making your decision to file for bankruptcy, double-check to see if other, less drastic options could make sense. For example, if you only have a little bit of debt, you might be better off if you went through consumer credit counseling. Negotiating with creditors is another option, but creditors are notorious for “forgetting” these agreements, so get them in writing!
Chapter 7
Be sure you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves the best option to erase your debt. This includes creditors and your relationship with creditors. Chapter 13 bankruptcy though will make you work out a payment plan to eliminate all your debts.
If you’re unsure, then you need to learn what a Chapter 7 bankruptcy can do for you, as opposed to what Chapter 13 does. Weigh all the information you can find on- and off-line to make an educated decision. If you’re really not sure how this all works after your research, meet with your lawyer and ask them prior to making a decision.
Filing for bankruptcy does not always result in losing your home. Depending on certain conditions, you might be able to keep it. You are still going to want to check out the homestead exemption either way just in case.
Consider filing a Chapter 13 bankruptcy for your filing. If you are receiving money on a regular basis and your unsecured debt is under $250,000, Chapter 13 will be available to you. This plan normally lasts from three to five years, your unsecured debt will be discharged. Keep in mind that even missing one payment can be enough for your case.
If concerned about keeping possessions like a car, find out if your attorney can reduce the payment. It is possible to get your car payment lowered if you file using Chapter 7. There are qualifications, such as the loan being high interest and a good work record for this option.
Don’t file for bankruptcy if you get is bigger than your bills. Bankruptcy may appear like the easier way to avoid paying your old bills, but it will devastate your credit for the next ten years.
Look into all the alternatives to bankruptcy before you choose to file for bankruptcy. Loan modification plans can help you are dealing with foreclosure. The lender can help your financial situation by getting interest rates lowered, so they may be willing to forgive some fees, change the loan term or reduce interest as ways of assisting you. When all is said and done, the creditors want their money, and they are willing to make concessions to get it and prevent the debtor from declaring bankruptcy.
It is possible to get an auto loan or mortgage during the repayment period for Chapter 13 bankruptcy. However, there are steps which must be taken to ensure you are within the law of bankruptcy. You need to speak with your trustee so that you can be approved for a new loan. It is important to make a budget and prove that you are able to afford the payment. You also have to prepare yourself to explain the reasons you need to buy the item.
That stress can lead to depression, if you do not take the necessary steps to fight it. Life will surely get better; you finish this process.
Make sure you act at the appropriate time. Timing can be critical when it comes to personal bankruptcy filings. In some cases, you should file right away, while other situations benefit from trying to get certain finances in better shape before filing. Speak with a bankruptcy lawyer to see when is the proper timing for you to file bankruptcy.
Before you file make sure that you are not doing anything to bring yourself in debt any more. Don’t go on a spending spree or increase your debt right before you file. The courts and your creditors will be looking at your current, as well as past, credit history when adjudicating your bankruptcy. Show that you are making a positive change to your current financial situation.
Make sure that you disclose every bit of financial information on your debts before filing. If you leave off even one tiny detail, you may end up in some serious trouble, or at the very least delayed. This includes any jobs you have on the side, extra cars or outstanding loans.
Bankruptcy Process
If bankruptcy is likely in your future, think about hiring a bankruptcy attorney. A qualified lawyer can access your need to file, go to court with you and make the process simple. Your lawyer can also show you how to fill out the paperwork, file it properly and be there to answer any questions you may have.
Research the rules and regulations of personal bankruptcy laws before you file. There are many traps in the bankruptcy laws that could lead to issues with your case. Some mistakes can even lead to having your case dismissed. Make sure you have a decent understanding of the bankruptcy process before you make any final decisions. This can save you a lot of time and make the bankruptcy process go as smoothly as possible.
You can easily see that there are multiple ways to handle personal bankruptcy. Don’t be overwhelmed by the great wealth of information available to you. Take some deep breaths, and think about what you’ve just learned. You’ll be able to make more considered decisions this way.
There are some debts that a bankruptcy will not eliminate. Debt like student loans will stay on your credit report whether or not you file. These types of debts need to be taken care of through alternate means, such as credit counseling or debt consolidation.