If the IRS or your other creditors are on to you about the money you owe, you should consider filing for bankruptcy. Although filing bankruptcy can have a major effect on a person’s credit record, it may be the only viable option. Check out the following tips to see what filing for bankruptcy entails and what can happen if you do.

Don’t avoid telling your lawyer specific details with your case. Just because you have told him something of importance that he will remember it. Don’t be afraid to speak up, as it is your case and your future will be affected by its outcome.

Try going to a personally recommended bankruptcy lawyer instead of using a phone book or the Internet. There are so many dime-a-dozen companies out there who make it a practice of preying on financial desperation. You need to make sure your bankruptcy goes smoothly, so find someone you know you can trust.

Do not give up hope. You might even be able to get back secured property that has been repossessed in the 90 days before filing. If you have been subject to a repossession during the 90 days before your filing, you stand a good change of getting your property back. Talk to your lawyer to find out how to go about properly filing a petition.

You may have heard bankruptcy referred to differently, either as Chapter 7 or Chapter 13. Learn the differences between the two before filing. Should you choose Chapter 7, your total debt load will be erased. Your former ties with creditors will cease to exist. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. To make the wisest choice, you will need to understand the consequences of each of these two options.

Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. Ensure that you have a meeting with a real lawyer instead of an assistant, since they can provide the best advice. Considering several different lawyers can help find someone to trust.

Chapter 13

Learn what you can about Chapter 13 bankruptcies. If your source of income is regular and your unsecured debt is less than a quarter million, Chapter 13 bankruptcy is something you are able to file for. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. Expect to make payments for up to 5 years before your unsecured debts are discharged. Remember that if you fail to make any of the payments on time, the court may dismiss your case.

Once your initial filing is complete, it is time to take some time to relax a little. Many debtors stress-out during the time of filing. This stress may lead to something worse like depression, so do what you can to fight that from happening. Your life will most likely improve once you’re over this hump, so relax.

There are circumstances where you are able to keep your car during a bankruptcy so be sure to ask your lawyer about possibly reducing the payments. Chapter 7 bankruptcy is one of the most common and effective. Here are the qualifications in regards to your vehicle: you must have bought it nine hundred and ten days or more before filing for personal bankruptcy; your loan must carry high interest; your work history must be steady and solid.

Even if you are involved with Chapter 13 bankruptcy, it is still possible to get a mortgage or an automobile loan. This is harder. You need to speak with your trustee so that you can be approved for a new loan. Create a budget and prove you can afford a new loan payment. You’ll also need a valid reason for making the purchase.

Act at the right time. Timing is critical, particularly when it comes to filing for bankruptcy. Sometimes you may want to wait to file and in other situations you may find it better to do it as soon as you can. Talk with a bankruptcy attorney to find out the ideal timing for filing based on your particular situation.

Consider any other options available before filing for personal bankruptcy. For example, you may want to think about credit counseling. Various non-profit companies are out there to give you assistance. They will negotiate with your creditors in order to reduce your payments and interest rates. You pay them and then they pay the creditors.

Personal Property

Filing for bankruptcy does not mean that you lose all of your assets. You will be able to keep your personal property. This may be things like jewelry, clothing, furniture and electronics. The laws of your state and the kind of bankruptcy for which you are filing, coupled with your financial situation, will determine what personal property you are allowed to retain. Additionally, the retention of large assets, such as your automobile and your home, is determined by these considerations.

As said in the beginning of the article, personal bankruptcy is always an option. Just be sure that you do not use it as your first choice. Arming yourself with knowledge is a good way to protect assets and approach the process wisely.