Bankruptcy: What To Consider When Filing

Bankruptcy effects a myriad of people each with different financial situations. However, some situations in life are simply beyond our control. Once debt reaches a certain level, bankruptcy may be the only option. If you discover that you are faced with bankruptcy, you can help yourself with the knowledge provided below.

If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. It is pointless to use credit cards if they can be discharged.

If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. You should not use your retirement savings unless the situation calls for it. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.

Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. You might feel tempted to not declare certain assets in your bankruptcy in order to protect them from forfeiture, but if you’re found out, the process could take longer, or worse, you might be banned from filing for bankruptcy completely.

Be honest when filing for bankruptcy. Don’t hide liabilities or assets, as they’ll come back and haunt you. Regardless of the agency you file with, ensure that you tell them all they should know about your current financial situation, regardless of how good or bad it is. Do not hold back anything, and form a sound plan to make peace with your reality.

Keep at it! Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. You may be able to get your property back if fewer than 90 days have passed between the repossession and are filing for bankruptcy. A qualified bankruptcy attorney can walk you through the petition process.

Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Most lawyers will meet with you for free and give you helpful advice, so meet with several. Only make a decision after you have met with several attorneys and all of your concerns and questions have been addressed. There is no need to offer an immediate hire, so take your time. That gives you the chance to speak to a number of lawyers.

Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. Be certain that the person you meet with is really a lawyer. Avoid meeting with paralegals or legal assistants because they cannot give you legal advice. Interviewing multiple attorneys is a good way to find the best fit.

If you’re unsure, then you need to learn what a Chapter 7 bankruptcy can do for you, as opposed to what Chapter 13 does. Research them online to see the positive and negative aspects of each one. Do not hesitate to have your lawyer explain any details that seem difficult to grasp. This will help ensure you make the right choice when filing.

Do not forget to make quality time for friends and family members. The process for bankruptcy can be hard. It takes a long time, it can be stressful, and people feel unworthy, guilty and ashamed. A lot of people hide away until the entire proceedings have been played out. Do not isolate yourself or you will put yourself at risk for depression. So, even though you may be ashamed of the situation you are in, you should still be around those you love.

Credit Score

If you are making more money than you owe, bankruptcy should not even be an option. You should know that filing for bankruptcy will ruin your credit score for at least ten years and that improving your credit score will be expensive.

Before going through the Chapter 7 filing process, ensure that your co-debtors are abreast of any implications relating to this process. When you file under Chapter 7, you will no longer be legally responsible for any debts that were signed by yourself and a co-debtor. However, creditors will want to hold your co-signer responsible completely.

If you find that filing for bankruptcy is the best option for you, be sure that you fully understand the process. Your process will be easier if you have the information. Apply the advice from this article to help yourself handle your finances in a calm, unstressed fashion.

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