The economy is in very bad these days. The result of a tough economy is that many people losing their jobs and going into debt. Debts can result in filing for bankruptcy, an outcome nobody ever wants.
Prior to filing for bankruptcy, be sure you have investigated all of your alternatives. You have other choices, including consumer credit counseling. Bankruptcy will leave a permanent scar on your credit report and before you take this huge step, you should search through every available option first, to help try and limit the damage to your credit.
If you’re in this position, you should know all about the laws that are in your state. Each state has their own set of rules regarding bankruptcy. Some states protect your home, and some may not. You should be familiar with the laws before filing for bankruptcy.
Do not use a credit card to manage your tax issues and then file bankruptcy. In many areas of the country, the debt cannot be discharged, and in the end you will be left owing the IRS a big sum of money. This means using a credit card is not necessary, since bankruptcy will discharge it.
You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. To find an itemized list detailing assets exempt from bankruptcy, find the Bankruptcy Code. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
Credit History
You have other options available like counseling for credit that consumers can use.Bankruptcy leaves a permanent mark on your credit history, 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.
Always weigh your options carefully prior to deciding to dive head first into filing a bankruptcy claim. There are numerous programs out there that may assist you with your debt, like a credit counseling program, a nonprofit group, government assistance, etc. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
The federal statutes covering bankruptcy can tell you exactly which assets that are excluded from bankruptcy. If you fail to do so, you might be blindsided when a possession that is important to you is taken to repay creditors.
Be certain to speak with an attorney, himself, since they cannot give legal advice.
Before filing a bankruptcy claim, make sure that your home is well protected. Filing for bankruptcy doesn’t automatically involve losing your home. Depending on certain conditions, you may very well end up being able to keep your home. You may also want to check out the homestead exemption because it may allow you to keep your home.
Understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Take the time to learn about them extensively, and look at the advantages and disadvantages of each.If you have trouble understanding the wealth of information, be sure to ask your attorney to explain anything that is unclear before you make your decision about filing.
Don’t file bankruptcy if you can afford to pay your bills. Bankruptcy might seem like a good way to get out of paying your bills, but your credit report will show the scar for the next ten years.
Make time to visit with family and friends during the bankruptcy process. The process for bankruptcy can be hard. It can be long and drawn out which adds lots of stress and leaves people feeling empty inside. Avoidance of friends of family during the process is not uncommon. You shouldn’t do this, though, as staying away from the world can amplify any emotional issue you are having, and they could even morph into full-blown clinical depression. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
Make sure the time is right when you act at an appropriate time. Timing can be critical when it comes to personal bankruptcy filings. In certain situations, it is better to file immediately, but other situations will warrant you waiting. Speak to a bankruptcy lawyer to see when is the best time for you to file bankruptcy.
It is not uncommon for bankruptcies to elicit feelings of guilt, guilty or ashamed. These feelings do not help you to make rash decisions and cause psychological problems.
Avoid using bankruptcy as a last resort. Some people will just ignore their outstanding debts, hoping that someone or something will come and save them, but this never ends well. It is too easy for debt to mount up and become uncontrollable, which could lead to loss of assets or wages. As soon as you’ve decided that you no longer have a handle on your debts, consult a bankruptcy lawyer to see if bankruptcy is right for you.
Bankruptcy is a difficult time that always leads to lots of other physical and emotional issues. To combat these problems, make sure you hire a reputable bankruptcy attorney. Do not hire based on price. It may be not be necessary to engage the lawyer who charges the highest fees; all you need is a costly attorney; just make sure he or she is qualified to handle your case. Make sure people in your circle of friends and the BBB. You could even attend a court hearing and observe lawyers handling their cases.
Gain an understanding of personal bankruptcy law before you can. There are some clauses within bankruptcy that could trip up your case. Some mistakes could lead to your case dismissed. Do as much research as possible about bankruptcy before taking the next step. Doing so will make the way to an easier process.
Do your research before hiring a bankruptcy attorney. This area of law attracts some inexperienced amateurs. Often times, people choose lawyers that aren’t licensed properly or that don’t have enough experience. Don’t fall victim to this. Information on lawyers and their ratings by clients can be found on the Internet.
Although the economy appears to be improving, there are many, like you, who are still struggling financially. Even when your financial situation is not producing enough income, there are some things one can do in order to avoid bankruptcy. With any luck, you now see that options exist to help you steer clear of bankruptcy. Good luck to you.