Bankruptcy installs such negative feelings into all those that consider it. Increasing debt, coupled with the inability to support their families is a real nightmare for many people. If these circumstances sound familiar, you stand to benefit from the tips that follow.
Bankruptcy Laws
Individuals often seek to file for personal bankruptcy protection if their debts exceed their ability to repay them. If you find yourself going through this, you should know all about the laws that are in your state. Bankruptcy laws vary from state to state so it is important to do your research. 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.
Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
Do not attempt to conceal any assets when filing for bankruptcy because you may be penalized when they are discovered. Wherever you file, that court has to be made aware of all details regarding your finances, positive and negative. Do not hold back anything, and form a sound plan to make peace with your reality.
Keep with what you have decided to do. If you’ve had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy. If the repossession occurred within 90 days from your filing date, it is possible that some of your property can be returned to you. Get the advice of a qualified attorney who can advise you about ways to accomplish this.
Chapter 13
Do some research to find out more about Chapter 13 and Chapter 7. In Chapter 7 bankruptcy, your debts are all eliminated. Your ties with all creditors will get dissolved. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
Always protect your house. It isn’t inevitable that you will lose your house when you file for bankruptcy. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.
Make sure that you really need to file for bankruptcy. You might be better off consolidating your debt or availing yourself of some other remedy. There is not easy process associated with personal bankruptcy. Your future credit will be affected by these actions. This is why you must ensure that bankruptcy is the only option left for you.
If you decide to file for bankruptcy, it’s important that you’re educated about your rights. Don’t take a debt collectors word for it simply because they tell you that you can’t have many or all of your debts erased by bankruptcy. There are few debts that can’t be discharged. If your creditors are telling you any other kind of debts cannot be cancelled, get a written proof and send it to the general office of your state’s attorney to report this illegal behavior.
If you are forced to file for bankruptcy, you should avoid being ashamed of yourself. Often, with bankruptcy, come feelings of guilt, shame and worthlessness. These feelings, however, are of no benefit to anyone, and they can be detrimental to your mental health. A good way to deal with bankruptcy is to make sure that you keep a stiff upper lip.
It is normal to feel apprehensive about filing for bankruptcy, because it is not an easy process. Now that you have read this article, you now never again have to be scared of bankruptcy. Start making use of this bankruptcy advice right now and give your financial life a fresh new start.
