There are few people who expect to file bankruptcy. Life can change quickly, and bankruptcy may be your only choice. Knowing how to deal with this is vital. If you discover that you are faced with bankruptcy, you can help yourself with the knowledge provided below.
When people owe more than what can pay, they have the option of filing for bankruptcy. When you are faced with this issue, begin to familiarize yourself with your state’s laws. The laws governing bankruptcy vary from state to state. Your home is safe in some states, but in others it’s not. Be sure you educate yourself on local laws prior to filing.
Do not use a credit card to manage your tax issues and then try to file 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. Bear this in mind; if the tax can be discharged, then the debt can be as well. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
Make sure you keep reminding your attorney about any important details in your case. Many times a lawyer may forget a key detail; therefore, it is important to remind your lawyer of any key information. Do not hesitate to speak up; this is your hearing and your future is on the line.
Be as honest as you possibly can when filing for bankruptcy; hiding liabilities or assets will only hurt you in the long run. Your bankruptcy lawyer has to know every detail of your finances, whether bad or good. Do not leave anything out and come up with smart plan to manage the situation you are dealing with.
Protect your house. Bankruptcy doesn’t always mean you’ll lose your home. You could keep your home; it depends on your home’s value or if a second mortgage is on your home. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
Chapter 13
Consider Chapter 13 bankruptcy, if you chose to file. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. You can secure your home under Chapter 13 and pay your debts with a payment plan. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Do not forget to be around those you love. Going through bankruptcy is a lot of stress. 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. Lots of people think they need to hide from everyone until this is all done. Pulling away from people who care for you will not help the situation, and can cause your negative feelings to intensify. Thus, you must keep living your life and socializing with those you love, no matter what is going on with your bankruptcy.
Look at all of your options prior to deciding to file for bankruptcy. Some alternatives to filing for personal bankruptcy include debt repayment plans, interest rate reduction plans, and debt consolidation. Talk with the personal bankruptcy lawyer to find out more. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. Some lenders will make concessions rather than losing the money owed to bankruptcy. These concessions include waiving late fees, lowering interest rates, and changing the loan term. Most creditors will be willing to work out an option to avoid not getting paid at all.
Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. It is more difficult. You will need to secure the trustee’s approval for any new debt obligation. Draw a budget up and show how you can pay the newer loan payment. An explanation of need will also be necessary.
If you decide to file for bankruptcy, it’s important that you’re educated about your rights. Bill collectors will lie to you and say you can’t have their bill discharged. Few debts exist that are not covered by bankruptcy, such as student loans or child support. If you are told differently by a collector, research the information yourself. If you find they are in error, get the name of their company, phone number and any identifying info so you can report it to the attorney general in your area.
If you have decided that your only option is filing for personal bankruptcy, you’ll want to know exactly the right steps to take to proceed . Your process will be much simpler if you have a large knowledge base. This article has provided much of that information, so that you can approach your finances in a less stressed state of mind.
