Filing for personal bankruptcy is an option that anyone with property repossessions should consider. 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.
Filing for bankruptcy is something many people are forced to do when there debts become too much of a burden, and they can no longer afford to pay them. If you have unmanageable debt, you need to familiarize yourself with regional bankruptcy laws. Each state has their own bankruptcy laws. Your home and other major assets may be protected in your state, while they are vulnerable in other states. It is important to be cognizant of the laws in your state before filing for bankruptcy.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. If the tax can be discharged, so can the debt. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Don’t give up. 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. Filing for bankruptcy may allow you to regain ownership of recently repossessed property. A lawyer will be able to assist you with filing the paperwork to get the items back.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Spend time researching the advantages and disadvantages of filing for each one of these. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
Being with the people who you love should be still be a top priority. The process for bankruptcy can be hard. It is often overwhelming, and not quick. Some people may feel embarrassed or feel their self-esteem has taken a beating from it. Most people adopt a very negative attitude toward bankruptcy. This is not recommended because you will only feel bad and this may cause you to feel depressed. So, it is critical that you keep spending time with the ones you love, regardless of the current financial situation.
Chapter 7
Take into consideration all the ramifications of a Chapter 7 bankruptcy. Filing for this can impact any co-debtors, such as friends or family. You will be freed of responsibility for debts that you share if you make a successful Chapter 7 filing. But, bear in mind, the debt now becomes the sole responsibility of your co-debtor.
It is important to file bankruptcy before its too late. Some people think that by ignoring financial problems, they will just disappear. This kind of thinking could prove to be a mistake. All your personal debts will easily go haywire, building and collapsing very quickly. This often leads to foreclosures and garnishments. Speak with a bankruptcy lawyer as soon as you become aware that you cannot handle your debts.
Do not forget to list each and every debt you have. Failing to disclose all of your financial information can cause your bankruptcy petition to be dismissed, or, at the very least, delayed. Even small amounts of money contribute to your overall financial picture, so do not exclude them. This may include secondary employments, vehicles you own and loans you still owe money on.
You should keep in mind that in the long run, bankruptcy can have a more positive impact on your credit score than continually missing payments towards your debt. Bankruptcy stays on your credit for quite some time. On the other hand, you can begin improving your damaged credit immediately. Getting a fresh start is one benefit of bankruptcy.
Try to get a referral from a trusted source before choosing an attorney to handle your bankruptcy and make sure they have no issues with the state bar or the better business bureau. This kind of law is usually where inexperienced attorney’s reside. Ascertain that your choice of attorney is an experienced, properly licensed one. By searching online, you can find background information about lawyers along with client ratings and any disciplinary record an attorney may have.
About two months after you’ve done bankruptcy, you can get copies of your various credit reports from the three agencies. You want to see an accurate record of the closure of your accounts and the discharge of your debts. Resolve any problems immediately so you can build up your credit score as quickly as possible.
As mention earlier, you always have the option to file for bankruptcy. Given that fact, it should be your last resort due to the consequences involved. Don’t sit back and let the process take control of you. Take control of the process by doing your research so that you don’t lose more than you need to.
