The economy is looking bad looking these days. The result of the dreadful economy is that many people losing their jobs and falling into debt. Debts can result in filing for bankruptcy, which is never a good thing.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. You can also avail yourself of other options, such as consumer credit counseling. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
If this describes your situation, you should do some research about bankruptcy laws in your state. Different states have different laws when it comes to bankruptcy. For example, some states protect you from losing your home in a bankruptcy, but others do not. You should be aware of local bankruptcy laws for your state before filing.
Don’t use credit cards to pay off your taxes if you’re going to file bankruptcy. In most states, 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.
Safeguard your home. Just because you’re going bankrupt doesn’t mean that you also have to be homeless! If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
Retirement funds should never be accessed unless all other options have been exhausted. If you have to use a portion of your savings, make sure that you leave enough to sustain you and your family for a couple of months.
Don’t avoid telling your lawyer specific details of your case. Don’t just assume that the attorney will remember something you told him weeks ago. Speak up, as this is your future we are talking about here.
Do not forget to be around those you love. Filing for bankruptcy is a difficult process. The long process can leave people stressed out and racked with guilt and shame over having their financial affairs laid out for everyone to see. Most people adopt a very negative attitude toward bankruptcy. However, self imposed isolation will only make you feel even worse about the process and could even lead to depression. It’s crucial to spend time with loved ones despite your present financial situation.
The federal statutes covering bankruptcy can tell you exactly which assets are exempt during the process. 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.
Chapter 13 Bankruptcy
Timing is everything. Filling for bankruptcy can be a matter of correctly assessing the right time to begin. In some cases, you should file for bankruptcy right away, but in others, there may be reasons why filing quickly would be a bad idea. Have a chat with a bankruptcy specialist to discover when the ultimate time would be for you to file.
Be sure you know how Chapter 7 and Chapter 13 bankruptcy. Chapter 7 is the best option to erase your debt. All happenings with creditors will go away. Chapter 13 bankruptcy though will make you work out a payment plan to eliminate all your debts.
Be certain you talk to the lawyer, not their paralegal or law clerk, instead of a paralegal or assistant; those people aren’t allowed to give legal advice.
Before you file, make sure you understand the laws as much as possible. There are many pitfalls you can easily fall into, such as transferring away assets to prevent them from being included in the filing. Also, you can’t go and max out your credit card just because you are about to file for bankruptcy.
Bankruptcy filings don’t necessarily mean that you have to end in the loss of your home. It may be possible to keep your home if the value has depreciated, as all this stuff comes into play when determining if you can keep the home. You may also want to check into homestead exemption because it may allow you to keep your home.
Don’t file bankruptcy if you get is bigger than your bills. Bankruptcy may seem to be the easy way out, but it is a huge mark on your credit score and remains there for up to 10 years.
Know that bankruptcy can be much better for your finances than missing payments or making late payments on debts. Bankruptcy stays on your credit for quite some time. On the other hand, you can begin improving your damaged credit immediately. A fresh start is a great benefit of bankruptcy.
In order for this to succeed, your car loan must be one with high interest, you need a solid work history and the car should have been bought 910 days or more prior to you filing.
Even as the economy begins to recover, many people are still in difficult financial straits. If you lack a steady job, you still may be able to prevent the need for a bankruptcy filing. Bankruptcy can be a difficult journey; however, the process can be made easier by learning the aforementioned information. Good luck.
Write down everything that you owe. You need to gather every debt you know you have, because this list is the starting point for a bankruptcy filing. Be sure you’re going through every record so you can be sure you’re getting the right amounts. Don’t do this process too fast because these amounts won’t get discharged if the numbers aren’t right.