No one thinks they will ever expects to find themselves having to file bankruptcy. If you have found yourself facing bankruptcy, you can help yourself with the knowledge provided below.
Most people end up filing for personal bankruptcy because they owe more than they make. If this describes your situation, it makes sense to become familiar with relevant laws. Different states have different laws regarding bankruptcy. Some states may protect you home, and some may not. You should be familiar with the laws for your state before filing for bankruptcy.
If you’re in this position, be sure that you know what the laws of your state are. 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.
Do not use a credit card to manage your tax issues and then file bankruptcy. Most states do not look at this debt as chargeable, meaning you will have to pay the IRS a lot of money. This makes using a credit care irrelevant, when it will just be discharged.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. A common rule is that dischargeable tax means dischargeable debt. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
The Bankruptcy Code lists assets considered exempt from forfeiture to pay off creditors. If you fail to do so, you could be setting yourself up for a lot of stress when your most important possessions are taken in the bankruptcy.
Filing for personal bankruptcy may possibly enable you to reclaim your personal property that have been repossessed, including cards, electronics and jewelry items. You may be able to recover repossessed property if they have been taken away from you within 90 days before you filed for bankruptcy. Speak to a lawyer that will provide you with guidance for the entire thing.
Always be honest and forthright when it comes to your bankruptcy petition. Not hiding any assets or income is essential for avoiding possible penalties and your ability to re-file at some point in the future.
Chapter 7
Be sure you can differentiate between Chapter 7 and Chapter 13 differ.Chapter 7 eliminates all outstanding debts. Any ties that you have concerning creditors will be dissolved. Chapter 13 bankruptcy allows for a five year repayment plan that takes 60 months to work with until the debts go away.
Never give up. You may be able to regain property like electronics, jewelry, or a car if they’ve been repossessed by filing for bankruptcy. If the repossession occurred within 90 days from your filing date, it is possible that some of your property can be returned to you. Speak with your attorney about filing the correct petition to get your property back.
Consider if Chapter 13 bankruptcy. If your source of income is regular and your unsecured debt is less than a quarter million, you can declare bankruptcy. 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.
Look at all the alternatives to bankruptcy before you choose to file for bankruptcy. Loan modification plans can help you get out of foreclosure. The lender can help your financial situation by getting interest rates lowered, so they may be willing to forgive some fees, and in some cases will allow you to pay the loan over a longer period of time. When all is said and done, creditors want their money, and they are willing to make concessions to get it and prevent the debtor from declaring bankruptcy.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. By researching each type, you can begin to understand which method is right for you. If you don’t understand the information you researched, consult with your attorney about the details before you decide which type of bankruptcy you want to file.
For instance, it is against the law to transfer any assets from the filer to another for a year before filing.
Financial Information
Filing for bankruptcy is not recommended when you have income more than your debts. Although bankruptcy may feel like a simple method of getting out of your large debt, it leaves a permanent mark on your credit history for up to 10 years.
Make a list of financial information on your bankruptcy petition. If you do not do so accurately, your petition could be dismissed, but at the least your claim will be denied. This financial information may include income from side jobs, extra cars and outstanding personal loans.
This could be considered as fraud, and even after bankruptcy you can be forced to pay all of that money back to the credit card company.
If you have fears that you will lose your car, ask your lawyer about the possibility of lowering your car payments. A lot of the time, your payments may be lowered due to Chapter 7 bankruptcy. There are certain requirements and restrictions such as a loan that has a high interest rate, cars purchased 910 days before you file, and a steady job history that can help you keep your vehicle.
You should understand that you need to speak with a bankruptcy attorney about what you should and should not do when it comes to bankruptcy. The process will be much simpler if you are well-informed. Now that you have read the advice shared here with you, you can move forward on the right financial path for you.