Filing for bankruptcy is a serious decision. It is important that you understand everything involved in filing process. Use the tips written in this guide you go in the proper direction.
Do not use a credit card to pay income taxes and then file for bankruptcy. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. A common rule is that dischargeable tax means dischargeable debt. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Always be honest when it comes to your bankruptcy petition.
Filing a bankruptcy petition might facilitate the return of your property, like your car, electronics or other items that may have been repossessed. You may be able to recover repossessed property if they have been taken away from you within 90 days ago. Speak to a lawyer who will provide you with guidance for the necessary paperwork.
If you are feeling like you are seriously going to have to file for bankruptcy then do not clear out your savings. You should always keep money saved for worse times. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.
Don’t pay for the consultation and ask him or her anything you want to know. Most attorneys offer free initial consultations, so consult with a few before settling on one. Only make a decision after you feel like your concerns and questions have been addressed. You don’t have to give them your decision right after this consultation. This allows you extra time to interview several attorneys.
Chapter 7
Don’t pay to for an initial consultation with a bankruptcy attorney, and thoroughly question each candidate. Almost all lawyers will give a free consultation, so meet with more than one before making a decision on whom to hire. Don’t hire an attorney who fails to address all your concerns and questions. You don’t have to make your decision right after this consultation. Take the time to meet with a number of attorneys.
Be certain that you know how Chapter 7 and Chapter 13 differ. Chapter 7 bankruptcy is intended to wipe out your debt. Any debts that you have with creditors will be dissolved. Chapter 13 bankruptcy though will make you work out a payment plan to eliminate all your debts.
Filing for bankruptcy does not necessarily mean that you will end up losing your home. Depending on if your home’s value has gone down or if it has a second mortgage, you may very well end up being able to keep your home. You are still going to want to check into homestead exemption because it may allow you to keep your home.
Never forget that you still deserve to enjoy life while you go through the bankruptcy process. It can be several months between the initial filing and the final discharge of debts. That stress can cause depression, if you don’t take care to avoid it. Once the process is complete your life will improve.
Understand the differences between a Chapter 7 and a Chapter 13 bankruptcy. Take the time to find out about each one online, and then figure out which one will be best for your particular situation. If you don’t understand the information you researched, talk to your attorney before making that serious decision.
Chapter 13
Take into consideration all the ramifications of a Chapter 7 bankruptcy. Filing for this can impact any co-debtors, such as friends or family. You can relieve yourself of any liability for debts that you may share with someone else through a Chapter 7 filing. Although filing for bankruptcy excludes your from financial responsibility, co-signers will still be expected to pay the loan amount in full.
Consider if Chapter 13 bankruptcy. If your total debt is under $250,000 in unsecured debt, Chapter 13 will be available to you. This lasts for three to five years and after this, in which you’ll be discharged from unsecured debt.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 once you finally get this situation over with.
File at exactly the right time to maximize the effect of your bankruptcy. The timing of your filing could be important to its success. There are times when you should file as soon as you can, but in some other situations it may be best to wait for the worst to be over. Speak with a bankruptcy lawyer about when the best time is to file for your specific needs.
Know your rights that you have as you file for bankruptcy.Some debtors will tell you that your debts can’t be bankrupted. There are a few debts that cannot be cleared, such as child support or student loan debt, but be sure to know the details when dealing with debt collectors. If you are told by a debt collector that your debts are not dischargeable, then report that company to your local attorney general’s office.
Make sure the time is right when you act at an appropriate time. Timing can be critical when it comes to personal bankruptcy filings. For some debtors, immediate filing is ideal, whereas in other cases, waiting a while is best. Speak with a bankruptcy lawyer to see when is the best time for your personal situation.
Don’t take large cash advances from credit cards prior to filing since the debts will be eliminated from these cards. This is fraud, and even if your other debts are discharged, you will have to pay the money back.
For example, you may not be aware that a filer is forbidden from transferring assets from his or her name for one full year before the petition is filed.
Make sure that you disclose every bit of financial information on your debts before filing. If you don’t do this, your petition could be delayed or dismissed. Include all jobs, such as property and vehicles.
If you’re thinking about filing bankruptcy, also think about hiring a lawyer. Your lawyer can determine if you eve need to file, and if you do, act as an advocate in court and make the process go more smoothly. You lawyer can also help you fill out and file paperwork and answer all your questions.
Clearly, when it comes to filing for personal bankruptcy, there are many options. Don’t stress about the amount of information before you. Take the time you need to think clearly and analyze the information. You will be more likely to make beneficial and thoughtful decisions as a result.