Nobody wakes up and says “I think I’ll get myself into debt and file for bankruptcy. If you see yourself headed towards bankruptcy, reviewing the advice presented below may help you understand what happens next.
When people owe more than what can pay, they have the option of filing for bankruptcy. If you have unmanageable debt, you need to familiarize yourself with regional bankruptcy laws. Each state has its own set of rules regarding bankruptcy. In a few states, they see to it that your house is protected. This is not the case when it comes to other states. See to it that you understand the bankruptcy laws in the area that you live prior to filing.
Be sure everything is clear to you about personal bankruptcy by using online resources. Department of Justice and National Association for Consumer Bankruptcy Institute are both sites that provide free advice.
Do not use a credit card to pay income taxes and then try to file for bankruptcy. In most states, you cannot get this debt discharged, and you may still owe money to the IRS. This makes using a credit care irrelevant, when it will just be discharged.
If you are meeting with a lawyer to discuss bankruptcy, the initial consultation should be free so ask every question you have. It is a good idea to consult several attorney before deciding on one. Only make a decision after you have met with several attorneys and all of your concerns and questions have been addressed. Take your time choosing the right attorney to assist in your bankruptcy. You can take your time and check out several attorneys before making your final selection.
Before pulling the trigger on bankruptcy, ensure that all other options have been considered. If you owe small amounts of money, you may be able to manage it with credit counseling. You may have luck negotiating lower payments by dealing directly with creditors, but make sure that you get written records of any debt modifications to which you agree.
Chapter 13 Bankruptcy
Being with the people who you love should be still be a top priority. Going through bankruptcy is a lot of stress. It is long, stressful and makes people feel like losers. Many people tend to hide until their process is completed. However, you will only feel worse about what has happened, which may lead you into depression. Because of this, you need to make sure you spend as much time as you can with your family and friends, even if you are ashamed of your finances.
Be sure you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 is the elimination of all of your debts for good. All of your financial ties to the people you owe money to will go away. Chapter 13 bankruptcy allows for a five year repayment plan that takes 60 months to work with until the debts go away.
Be certain to speak with an attorney, not their paralegal or law clerk, instead of a paralegal or assistant; those people aren’t allowed to give legal advice.
Keep in mind that filing for Chapter 7 bankruptcy may affect other people than just you, including family members, and in some cases, business associates. Debts which you shared with another will not be your responsibility any longer if you file for personal bankruptcy under Chapter 7. However, the creditors could come after your co-signer and demand full payment for the debt.
Don’t file bankruptcy if you can afford to pay your bills. 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.
This kind of stress can take a heavy toll on your personal life, so do what you can to fight that from happening. Life will get better once you get this situation over with.
Be sure you know the bankruptcy laws before you think about filing. There are many pitfalls you can easily fall into, such as transferring away assets to prevent them from being included in the filing. It is also against the law to max out your credit cards before filing for bankruptcy.
It is possible to get an auto loan or mortgage during the repayment period for Chapter 13 case remains active.You have to meet with your trustee to get approval for any new loan. You will need to show them why and how you will be able to afford your new loan. You will also need to explain why this item needs to be purchased.
Know the rights when filing for bankruptcy. Some bill collectors will try to 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, that can’t be bankrupted. If you are unsure about specific types of debt, report the collector to the attorney general’s office in your state.
Don’t stop the the bankruptcy process if you find a job. Filing still might be the best thing to do. It can be very beneficial to file for bankruptcy. Your repayment ability will be determined by your income at the time of your filing.
When you are forced to file for bankruptcy, you should have some excellent knowledge on what to do. When it comes to filing for bankruptcy, knowledge really is power. This article has shown you much of this important information, and you can now face your financial situation in a calmer and less stressed manner.