Everyone is suffering from the bad economy. With a bad economy means that more and more people are losing jobs and getting in debt. Being unable to pay your debts will eventually lead to bankruptcy, which is the last hope for many people. If you’re in danger of going through bankruptcy, then the below article can help you in getting out of it.
Before you file for bankruptcy, carefully consider if it is the right option for you. You can find services like counseling for credit that consumers can use. Since your credit history will forever note the bankruptcy, you want to make sure that you have tried everything else before you take an action such as this, in order to minimize the effect it will have with regard to your credit history.
You may have heard bankruptcy referred to differently, either as Chapter 7 or Chapter 13. Learn the differences between the two before filing. Chapter 7 bankruptcy completely wipes out your debt. Your responsibilities to your creditors will be satisfied. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. You must know about the different bankruptcy types, and how each can affect you.
Do not file for bankruptcy if your income is greater than your bills. Although you may see bankruptcy as a free pass to eliminate your debt, if you can slowly whittle away at your debt with your income, it will be much better than killing your credit score with a bankruptcy filing.
Remember to have fun with your life when you’re done with the filing process initially. It can be several months between the initial filing and the final discharge of debts. This stress may lead to something worse like depression, so do what you can to fight that from happening. Once the process is complete your life will improve.
Take action when the time is right. Proper timing is important, especially when it comes to personal bankruptcy. In certain situations, you should file right away, but other situations will warrant you waiting. Speak with a bankruptcy lawyer to discuss the proper timing for you to file bankruptcy.
Go ahead and file for personal bankruptcy as soon as you realize it is necessary. Lots of people turn the other shoulder towards their financial woes and hope that they’ll disappear eventually. However, you should never do this. Debt could become uncontrollable and by not dealing with them properly, your wages could be garnished or you may find your home in foreclosure. The minute you realize that your debts are too big to take care of, contact a bankruptcy attorney to discuss your options.
Consider every option prior to filing for bankruptcy. You should consider credit counseling. You can get the help you need from a variety of non-profit credit counseling companies. These companies lower your interest and payments by working with your creditors. They pay your debts and you repay them.
You do not lose everything that you own when you decide to declare bankruptcy. Personal property is exempt from bankruptcy claims. This will include things like clothes, jewelry and electronics. This will depend on your state’s laws, the type of bankruptcy you file for, and your financial situation, but you may be able to retain large assets like your home and car.
Take the time to make a complete list of your debts. You will need this list when you file, so it is important for it to be as compete as possible. Be 100% certain that the amounts you are claiming as being owed are true and correct. Take your time and make sure all the numbers are correct.
It is important to list all debts when filling out your bankruptcy papers. Debts that you neglect to include in your paperwork won’t be discharged. Be certain to list all of your debts so that none that could have been discharged will be overlooked.
There are lawyers who maintain a telephone service meant to field calls from creditors attempting to contact debtors who have filed for bankruptcy. You can just give them the number and they can call for confirmation that your debt is indeed part of a bankruptcy. That will help you avoid them in the future.
Before you commit to a bankruptcy filing, make sure that your most troublesome debts can actually be discharged through bankruptcy. Debts like student loans may stay in your financial history regardless. These types of debts need to be taken care of through alternate means, such as credit counseling or debt consolidation.
Remember that you have the option to file again if your bankruptcy filing gets dismissed due to an error on your part. However, in most cases you will only have the benefit of the automatic stay for 30 days after you file if your case was already dismissed once. It is possible to have the stay extended by making a showing that the error was excusable and that you should be permitted to file again.
Credit Card Debt
If most of your debt is from taxes, you are probably better off not filing for bankruptcy. It’s not uncommon for some people to assume they can pay the tax amount owed with credit cards, and then use bankruptcy to hide behind. The assumption they are working under is that all of their credit card debt will be treated equally, allowing them to get their tax payment discharged. The laws governing bankruptcy forbid this practice and you will be left with both your tax and credit card debt.
The economy is showing signs of recovery, but unemployment and underemployment are still high. Just keep in mind that there are resources available to help you to avoid using bankruptcy, even if you do not have steady income. Hopefully, you are now aware of how to get yourself or your loved ones on the right track in order to avoid bankruptcy. Best of luck.