Do not take bankruptcy lightly, this is a serious thing. Before you file for personal bankruptcy, be sure that you understand all of the ramifications. Use the tips written in this guide to help you go in the proper direction. Whatever difficult choices you must make, it can be made easier with research.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Generally speaking if you can discharge the tax, you can discharge the debt. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Ask yourself if filing for bankruptcy is the right thing to do. You have other options available like consumer credit counselling services. Be sure to consider all options before filing for personal bankruptcy, as this will take a large toll on your credit score for the next ten years.
Always be honest with the information you give about your finances. Lying on your filing can cause dire consequences such as: delays, penalties, being prevented from re-filing, or even jail time.
Research what assets are exempt from seizure before you decide to declare bankruptcy. The Bankruptcy Code lists the kinds of assets which are exempted when it comes to the bankruptcy process. Many belongings may become eligible for repossession or seizure after filing for bankruptcy. You wouldn’t want to unexpectedly lose any possessions you treasure.
If you aren’t totally honest about your assets when filing a bankruptcy petition, you could get into serious trouble. It is necessary to be open regarding both the positive and negative aspects of your financial life. Don’t withhold information, and create a smart way of coping with the reality of the situation.
You should not have to pay for a consultation with a bankruptcy attorney. Make sure you ask lots of questions. Most attorneys offer free initial consultations, and you should take advantage of the chance to interview multiple practitioners. Don’t hire an attorney who fails to address all your concerns and questions. There is no need to offer an immediate hire, so take your time. Be sure to talk with a number of lawyers, and compare the information you receive.
Chapter 13
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. Under Chapter 7 type bankruptcy, all debts are forgiven. You will no longer be liable for any money that you owe to your creditors. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. Both options have advantages and drawbacks, so do your research before deciding.
Most bankruptcy lawyers give free consultation, so try to meet with these types of lawyers before deciding on hiring one. Be certain to speak with an attorney, not their paralegal or law clerk, since they cannot give legal advice. Looking for an attorney will help you find a lawyer you feel good around.
Protect your house. Bankruptcy filings do not necessarily mean that you have to lose your house. It is entirely possible that you will be able to keep your home. This is dependent upon the your home’s value and whether or not you have taken a second mortgage. You may also want to check out the homestead exemption because it may allow you to keep your home.
Debt Repayment
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. Loan modification can help you get out of foreclosure. This type of plan allows your lender to work with you eliminating charges, extending your loan, and lowering interest rates to help you pay back the loan without drowning in debt. After all is said and done, your creditors will still want their money. For this reason, you may wish to investigate debt repayment programs in lieu of bankruptcy programs.
When you are looking at a Chapter 7 personal bankruptcy, you may well have debts to worry about for which you share responsibility with another person, such as a spouse, family member, or business partner. Once you complete a Chapter 7 bankruptcy, you will be free of any responsibility of debt, which could put all responsibility on someone close to you. Creditors, however, will hold the co-signer liable for the entire balance of the debt.
As you have seen, filing for personal bankruptcy can be complicated. You may become overwhelmed with the process. If that begins to happen, always refer back to these tips. Take a few minutes to think about these tips. You’ll be able to make more considered decisions this way.
