There are quite a number of people who have been affected by the economy, and now find themselves buried in debt. Filing chapter 7 or 11 can be the last option for many people. You may have found yourself in the same situation, and you should know that bankruptcy could be a good option for you. Keep reading to see if this is a viable solution for you.
Do not use a credit card to manage your tax issues and then try to file bankruptcy. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. If the tax can be discharged, so can the debt. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
When it appears likely that you will file a petition, do not start spending your last remaining funds on debt repayment. Retirement accounts should never be accessed unless all other options have been exhausted. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. Whomever you plan to use should know a lot about the finances that you have, both the good and the bad. Divulge all of your information so that you and your lawyer can devise the best strategy for dealing with your situation.
If you’re going to file bankruptcy, you need an attorney. Bankruptcy is complicated, and having someone to help you navigate the process is crucial. An attorney specializing in personal bankruptcies can assist and make certain things are being handled correctly.
Brush up on the latest bankruptcy regulations before you decide whether or not to file. Bankruptcy law evolves constantly, and it’s important to stay up-to-date to ensure that you file properly. To learn about any changes, search the Internet or contact your state’s legislative office.
Chapter 13 Bankruptcy
Know the differences between Chapter 7 and Chapter 13 bankruptcy. Should you choose Chapter 7, your total debt load will be erased. Your former ties with creditors will cease to exist. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.
Most bankruptcy lawyers offer a free consultation, so meet with several before you decide on one. It is important to meet with the actual lawyer, because paralegals or assistants cannot give you legal advice. Searching for the best lawyer will help you located the comfort you need during this time.
If you are going to be filing for bankruptcy, think about filing Chapter 13. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. 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.
Although the entire process can be stressful, do not allow the stress to take over. A lot of debtors usually get stressed when they file. Make sure you take care of your part and let your attorney do the rest. Remember that your situation is going to improve after you file for bankruptcy.
Before you decide to file for Chapter 7 bankruptcy, consider how it could affect other people on your credit accounts, such as family members or business partners. Speak to an attorney or read the bankruptcy laws in your state to find out if certain loans can be excluded from your filing. However, if you had a co-debtor, they will be required to pay the debt.
Be careful on how you pay your debts before you file a personal bankruptcy. The bankruptcy code stipulates that you cannot make certain payments to creditors or family for specified periods of time before filing. Study applicable regulations prior to making any financial choices.
After filing for bankruptcy, many individuals vow they will avoid the use of credit cards and all forms of credit. Since using credit responsibly is the only way to improve your credit score, this is not such a good idea. If you aren’t using any credit, then it will be very difficult to get your credit score high enough to be able to purchase things like a car or home in the future. You can start building up a more responsible credit history by opening one credit card account.
When filing for bankruptcy, make sure that you hire a lawyer to represent you. The job of a bankruptcy lawyer is to clarify your need to file, stand with you before the court and make the process easier. An attorney can also complete the required paperwork and provide advice as you go through the process.
If you find out that you don’t qualify for the Homestead Exemption after filing Chapter 7 bankruptcy, you may be able to file Chapter 13 in addition for your mortgage. Sometimes it is better to switch the whole Chapter 7 case to the Chapter 13 case. Speak with your attorney for advice on this.
Make sure that you are aware of what debts will be able to be eliminated with the bankruptcy. Debts like student loans always remain on your report even if you file. Instead, credit repair agencies or a loan consolidation service should be used for reducing debt.
You should now understand that there is more than one path to take when it comes to bankruptcy. You can get freedom from economic stress and get back on an even playing field financially, if you take a steady and focused approach to the matter.