Filing personal bankruptcy is a somewhat complex process. There are different kinds of bankruptcy you can file, and the kind you select depends on your individual financial picture and what types of debt you have. Prior to filing your petition, you really need to gain an understanding of how personal bankruptcies work. The following tips can help you get started.
A lot of people find themselves needing to file bankruptcy when they are unable to pay their bills. If this sounds familiar, you should read up on the bankruptcy laws in your state. Laws differ from one state to the other. For example, whether or not you can keep your home, as well as what you need to do to keep it, is different for every state. Be sure to have some familiarity with the law in your jurisdiction.
Credit Card
Do not use a credit card to pay income taxes and then file for bankruptcy. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
If filing bankruptcy is in your future, don’t waste any savings you may have attempting to pay off your debts. You should make every effort to leave your retirement accounts untouched until your retire. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
Research what assets are exempt from seizure before you decide to declare bankruptcy. Certain assets, as listed in the local bankruptcy regulations, are immune from seizure during bankruptcy. You need to read the exemptions for your state, so you know what property you can protect. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
Do not give up hope. Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. If the items were repossessed less than three months prior to your filing date, you may be able to recover them. Talk to your lawyer to find out how to go about properly filing a petition.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Most lawyers offer free consultations, so talk to a few before making your decision. You should make a final decision only once all of the questions or concerns are sufficiently attended to. Take your time before you decide to file after you meet with your lawyer. So you have sufficient time to speak with a number of lawyers.
If bankruptcy is an option for you, secure the services of an attorney. With all the ins and outs of bankruptcies, it can be hard to grasp all the knowledge. Talk to a bankruptcy lawyer, they can help clarify anything that you might have confusion with.
Unsecured Debt
Consider Chapter 13 bankruptcy, if you chose to file. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. This lets you keep any real estate and personal property while you repay all your debts through a consolidation program. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Consider that if you even miss one payment, your case will not be considered by the court.
Bankruptcy is a difficult time that always leads to lots of stress. To have a reliable and trustworthy guide through the process, find a highly qualified attorney. Don’t make your choice to retain a particular lawyer simply because they are the cheapest. Your lawyer does not necessarily have to be the most expensive one; however, you should be certain of his or her qualifications and abilities. Look to the bureau for better business, consultation, as well as others who have formerly experienced bankruptcy for more information about lawyers. Attending a court hearing will give you experience as to how lawyers handle these cases.
Bankruptcy laws are very exact and very important, so ensure that you’re well aware of all current laws before you file a petition. There are often laws prohibiting the transfer of money from the filer for a certain period preceding the bankruptcy filing. It is also illegal for someone who files for bankruptcy to drastically increase their debts on credit cards immediately before filing.
This article has hopefully made it clear that declaring bankruptcy is a big decision that should be considered at length. If you know what makes sense for you, you can work with an experienced bankruptcy lawyer and get ready to experience a clean financial slate.
