Filing bankruptcy is a complicated process. There are different chapters of bankruptcy, and your personal financial situation will dictate which type you should choose. This article has information that can help you learn more about personal bankruptcy.
When people owe more than what can pay, they have the option of filing for bankruptcy. If this sounds like you, start familiarizing yourself with your state laws. Each state has its own laws regarding personal bankruptcy. For instance, your home might be protected in some states while you might lose it in others. Familiarize yourself with the bankruptcy laws of your state prior to filing.
Credit Card
Don’t use credit card to pay off your taxes before filing for bankruptcy. In many parts of the country, this debt won’t be discharged, and you could be left owing a significant amount to the IRS. This means using a credit card is not necessary, since bankruptcy will discharge it.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. Bankruptcy exemptions are properties may not be seized during bankruptcy. It is important to be aware of this list so you will know what assets are saved. This will ensure that you do not have any surprises once you have filed bankruptcy.
Understand the differences between 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 something doesn’t make sense to you, be sure to ask your attorney to explain anything that is unclear before you make your decision about filing.
Chapter 13 Bankruptcy
Never pay to have a consultation with a lawyer, and ask a lot of questions. Seek free consultations from a handful of lawyers, before deciding which one to hire. Only choose an attorney once all your concerns are answered to your satisfaction. After your consultation, take your time to make your decision. You have lots of time for consulting with other lawyers.
Consider if Chapter 13 bankruptcy for your filing. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, Chapter 13 bankruptcy is something you are able to file for. 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.
Don’t file for bankruptcy the income that you get is bigger than your debts. Bankruptcy may appear like the easier way to avoid paying your old bills, but your credit report will show the scar for the next ten years.
You can take steps to hang onto your house. You don’t have to lose your home just because you are filing for bankruptcy. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. You could also check out the homestead exemption. This lets you continue living in your house, depending on whether you meet certain financial requirements.
In order for this to be considered, you must have bought your car in excess of 910 days before filing, you need a solid work history and the car should have been bought 910 days or more prior to you filing.
Before you decide to file for Chapter 7 bankruptcy, think about what effect that is going to have on any co-signers you have, as your family and friends may be affected. However, if you had a co-debtor, which spell financial disaster for them.
Consider filing a Chapter 13 bankruptcy. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
Make sure you file a bankruptcy claim. Timing is very important when it comes to personal bankruptcy cases.Sometimes, filing as soon as you can is best, at other times, it is wise to get past the worst problems first. Speak with a bankruptcy lawyer to determine what the ideal timing is for your personal situation.
Bankruptcy is a host of stress. To have a reliable and trustworthy guide through the process, hire a good lawyer. Don’t let cost be the cheapest. It is not 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 that you verify their reputation through various sources including people who have experienced bankruptcy give your circle of friends and the BBB.You could even attend a court hearing and observe lawyers handling their cases.
Filing for bankruptcy is not the best choice if your monthly income is enough to cover your bills. The cost to your credit history far outweighs the simplicity of the easy-out bankruptcy. This is a hard pill to swallow for many.
Consider all of your options before filing for personal bankruptcy. You may want to consider credit counseling instead. There are some good non-profit debt counseling services available. They can speak with your creditors to get your payments and your interest rates. You make payments to them and they pay your creditors through them.
You need to start getting responsible with your money even before you actually file for bankruptcy. Don’t go on a spending spree or increase your debt right before filing. Creditors and even judges look at your current and past financial history when they are going through your personal bankruptcy. You should demonstrate through your current behavior that you are ready to act in a financially responsible manner.
Watch how debts are paid off prior to filing. You may find that bankruptcy law prohibits you from paying back some types of creditors for 90 days before you file, and a year for family members. Before making important decisions in regards to your finances, be sure you understand the laws.
Bankruptcy is not a decision to be taken lightly. After weighing all of your options, if you conclude that bankruptcy is the best option for your particular situation, be sure to hire a competent attorney. Follow the advice given in this article to get through this rough time and move on to a more secure financial future.