The economy has been in a poor state for several years now. In a weak economy, many people find themselves out of work and accumulating debt. High debt often leads to the miserable state of bankruptcy. If you, a friend, or a loved one is in financial trouble, this article could help decide if bankruptcy is the right option.
Do not use a credit card to pay income taxes and then file for bankruptcy. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. The rule here is that if you can get the tax discharged then you can get the debt discharged. This makes using a credit care irrelevant, since bankruptcy will discharge it.
Consider all options before deciding to file for personal bankruptcy. Look into credit counseling to see if it could help you work out of your debt without bankruptcy. Since your credit history will forever note the bankruptcy, you want to make sure that you have tried everything else before you take an action such as this, in order to minimize the effect it will have with regard to your credit history.
Don’t fear reminding your attorney of any specific details of your case. Don’t just assume they already know and that they have these important details committed to memory or written down. Do not hesitate to speak up; this is your hearing and your future is on the line.
Before you file for personal bankruptcy, be sure that you are cognizant of all current laws. Laws are subject to change, and it’s important that you’re educating yourself about current code only. All of these changes will be addressed on the state’s legislative site. You can also contact them directly by phone or office visit.
Know the differences between Chapter 7 and Chapter 13 bankruptcy. Every one of your debts will be gone if you decide to go with Chapter 7. With very few exceptions, the connections between you and your creditors will be severed. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. 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.
Don’t hide from your friends and family while you go through bankruptcy. Going through bankruptcy is difficult. This long and stressful process can leave a person feeling guilt ridden, unworthy and ashamed. Many people tend to hide until their process is completed. However, becoming a hermit will only increase feelings of self-doubt and could make you depressed. So, it is critical that you keep spending time with the ones you love, regardless of the current financial situation.
File at exactly the right time to maximize the effect of your bankruptcy. In bankruptcy filing, timing is quite important. While there are times that it is ideal to file soon, there are other times in which you should wait. Find out when the correct time is for you to file for bankruptcy from a bankruptcy legal professional.
Bankruptcy can be overwhelming to most people, and can be quite stressful. To help yourself deal with this stressful situation, make sure you hire a legitimate attorney. Don’t skimp when hiring a good lawyer. The cheapest attorney may not be the best, but the most expensive may not be the best either. Rely on word-of-mouth referrals from others who have filed for bankruptcy, check the BBB, and take advantage of free consultation offers. You can attend court hearings if you want to see a prospective attorney in action.
Don’t wait until the last minute to file bankruptcy. Some people think that by ignoring financial problems, they will just disappear. This kind of thinking could prove to be a mistake. Yet you can have debtors come after you and potentially take your home if you are not handling your debts properly. When you find that you cannot take care of your debts anymore speak with an attorney for bankruptcy to talk things over.
Bankruptcy laws are very exact and very important, so ensure that you’re well aware of all current laws before you file a petition. As an example, it is prohibited for someone to transfer assets from the filer’s name for one year prior to filing. It’s also prohibted to run up debt on credit cards just prior to filing.
Don’t take large cash advances from credit cards prior to filing since the debts will be eliminated from these cards. Not only is this fraud, but you could end up having to pay back the money, even once you have filed for bankruptcy.
Avoid Bankruptcy
The economic recovery has bypassed many people, leaving their finances in disarray. Even if you do not have a steady income, you may still be able to avoid bankruptcy. Now you know all the options available to avoid bankruptcy, if at all possible. Godspeed.
